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