Mod 37: Partnership Taxation Key Terms Flashcards Preview

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Flashcards in Mod 37: Partnership Taxation Key Terms Deck (37):
1

Date of Basis of inventory sold by a partnership, when the inventory was contributed by the partner.

Basis goes from date contributed to partnership

2

What depended on the character of the property transferred is...

When your basis begins

3

Offering materials

Materials to sell partnership interest

4

4797

Recapture from sec. 1231 assets

5

3 items not deductible on form 1065 (partnership returns)

1 foreign income taxes paid

2 investment interest exp.

3 179 expenses

6

Partnership returns are considered...

Info returns

7

Guaranteed payments are considered...

Distributions of ordinary income

8

Investment interest on schedule K goes to...

Schedule A

9

Net earnings from self employment calculation

Net earnings from self-employment =
Guaranteed payments +/- ordinary income

10

Schedule K-1 percentage does not apply to...

Guaranteed payments to partners

11

Contributions to charities are...

Not used to arrive at ordinary income

12

Partner can only deduct share of ordinary loss up to their partnership basis, it is only deductible on your form...

1040

13

Unused partner losses are...

Carried forward indefinitely

14

5 item calculation to arrive at partner's total basis

Partner's beginning basis
+ share of all income items
+ contributions of property
- withdrawals of assets
+ % of debts partner is personally liable for
= total basis

15

At risk basis:

This basis includes...

Share of liabilities you are personally liable for

16

Guaranteed payments are included on schedule K-1 to be taxed as...

Ordinary income to partners

17

When calculating tax basis, guaranteed payments are...

Never used to arrive at basis

18

A small partnership with average annual gross receipts of...2

1 $1 million or less over 3 year period

2 can use cash basis

19

When a partner sells his interest, the selling price is known as...

Amount realized

20

Amount realized calculation (for partner selling his interest)

Amount realized =
(cash) + (assumption of old liabilities by new partner)

21

If the partner loses track of basis, the government allows you to calculate an alternative basis. What is the calculation?

Basis = capital account + share of liabilities

22

Sale of a partnership interest is a sale of...

A capital asset

23

751 gain is...

2) a 751 gain is treated as...

Percentage gain in non capital assets partner is selling

2) ordinary income

24

Adjusted basis per books

Value of assets on cash basis

25

Market value

Value if company is on accrual basis

26

To calculate ordinary income of a company, you use...

Whatever basis the company is on

27

Unrealized receivables are part of...

Sec. 751 ordinary income recapture

28

Income in excess of a sec. 751 ordinary income recapture is...

Treated as a capital gain

29

When the is a non liquidating distribution...

No loss is recognized

30

When there is a liquidating distribution, there is a loss when only the following 3 items exist...

1 cash

2 inventory

3 unrealized receivables

31

When there is a liquidating distribution, there is a loss when only cash, inventory or unrealized receivables are distributed for...

Less than your basis

32

When there is a liquidating distribution, and cash, inventory and unrealized receivables are distributed with land or other property...

The distribution is tainted

33

Taint

Causes loss not to be recognized

34

Current, definition

Non liquidating distribution

35

In both liquidating and non liquidating distributions, you have a gain if...

Cash exceeds basis of partnership interest

36

For tax purposes, a retiring partner who receives retirement payments ceases to be regarded as a partner...

Only after partner's entire interest in partnership is liquidated

37

An electing large partnership (over 100 partners):

2 deductions

1 sec. 179 exp. deducted as ordinary income

2 charitable contributions limited to 10% limit

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