1-

2-

If partnership debt is reduced and a partner is deemed to recelve a cash distribution, what Impact does the deemed distribution have on the partner if it is in excess of her tax basis? Multiple Choice The parther will treat the distribution in excess of her basis as ordinary Income. The partner will treat the distribution in excess of her basis as capital galn. The partner will not ever be taxed on the distribution in excess of her basis. The partner will not be taxed on the distribution in excess of her basis until she sells her partnership Interest. KIm recelved a one-third profits and capital Interest in Bright Line, LLC, in exchange for legal services she provided. In addition to her share of partnershIp profits or losses, she recelves a $33,000 guaranteed payment each year for ongolng services she provides to the LLC. For X4, Bright Line reported the following revenues and expenses: sales$153,000, cost of goods sold $93,000, depreclation expense $48,000, long-term capital galns $18,000, qualified dividends- $6,300, and municlpal Bond Interest- $3,300. How much ordinary business Income (loss) will Bright Line allocate to KIm on her Schedule K-1 for X4? Multiple Choice ($16,000) $7,000 $10,000 $16,000 None of the choices will be reported as ordinary business Income (loss) on Schedule K-1