Question :
41. The partnership of Truman and Hanover realized the following items : 1313614
41. The partnership of Truman and Hanover realized the following items of income during the year ended December 31, 2014:
Net income from operations$65,000
Dividends from domestic corporations$ 4,000
Interest on corporate bonds$ 3,000
Net long-term capital gains$ 5,000
Net short-term capital gains$ 1,000
Both the partners are on a calendar year basis. What is the total income which should be reported as ordinary income from business activities of the partnership for 2014?
a. $0
b. $65,000
c. $69,000
d. $71,000
e. None of the above
42. Which of the following items must be reported separately from ordinary income or loss on a partnership return?
a. Capital losses
b. Miscellaneous income
c. Cost of goods sold
d. Sales income
e. None of the above
43. For tax purposes, in computing the ordinary income of a partnership, a deduction is allowed for:
a. Payments to partners, determined without regard to the income of the partnership, for services provided to the partnership.
b. The net operating loss deduction.
c. Contributions to charitable organizations.
d. Personal exemptions of the partners.
e. None of the above.
44. Which one of the following is not true about partnerships and their income-reporting process?
a. The partnership must file a Form 1065.
b. The partner’s share of income/loss is presented on Schedule K-1.
c. A partner’s deductible loss is limited to his basis in the partnership.
d. The partnership pays income tax.
e. All of the above are true.
45. The partnership of Felix and Oscar had the following items of income during the tax year ended December 31, 2014:
Income from operations$156,000
Tax-exempt interest income$ 8,000
Dividend income$ 6,000
What is the total ordinary income from business activities passed through by the partnership for the 2014 tax year?
a. $156,000
b. $157,000
c. $162,000
d. $170,000
e. None of the above
46. Nash and Ford are partners who share profits and losses equally. For the year ended December 31, 2014, the partnership had book income of $80,000 which included the following deductions:
a. $80,000
b. $85,000
c. $140,000
d. $145,000
e. None of the above
47. Phil and Bill each own a 50 percent interest in P&B Interests. P&B Interests has ordinary income for the year of $35,000 before guaranteed payments to Phil. If Phil receives guaranteed payments of $25,000 during the tax year, what is the total income or loss that should be reported by Bill from the partnership for this tax year?
a. $5,000 income
b. $17,500 income
c. $25,000 income
d. $30,000 income
e. None of the above
48. Barbara receives a current distribution consisting of $2,000 cash plus other property with an adjusted basis to the partnership of $2,300 and a fair market value on the date of the distribution of $7,000. Barbara has a 10 percent interest in the partnership and her basis in her partnership interest, immediately prior to the distribution, is $5,000. What is Barbara’s basis in the non-cash property received in the current distribution?
a. $2,000
b. $2,300
c. $3,000
d. $7,000
e. None of the above
49. Jim’s basis in his partnership is $200,000. His share of the 2014 income is $60,000. The partnership gave him a $75,000 distribution in 2014. What is his new basis in the partnership and what is his taxable income?
a. $200,000; $75,000
b. $260,000; $60,000
c. $140,000; $60,000
d. $185,000; $60,000
e. $185,000; $135,000
50. Salix Associates is a partnership with an October 31 year-end. For the fiscal year ended October 31, 2014, Salix Associates reported ordinary income of $100,000, after deducting guaranteed payments. Max, a calendar year taxpayer, is a 30 percent partner in the partnership and received $2,000 monthly as a guaranteed payment for the calendar year 2013, and $2,100 monthly for the calendar year 2014. What is the total income from the partnership that Max should report on his 2014 individual income tax return?
a. $30,000
b. $54,200
c. $55,000
d. $55,200
e. None of the above
