1- Examples of transactions that may be recharacterized as constructive dividends include:

A- loan by a shareholder to the corporation.

B -unreasonable compensation.

C -overpaying for a shareholder's property.

D -All of the above.

2-If a corporation makes a distribution that results in a taxable dividend that is included in shareholders' gross income:

A -the corporation's E&P must be reduced by the depreciated value of the distribution.

B -the corporation's E&P must be reduced by the taxable amount of the distribution.

C -the corporation does not reduce its E&P.

D -None of the above.

3-Beane Office Equipment, Inc. distributed $5,000 in cash plus land with an adjusted basis of $90,000 and a fair market value of $75,000 to its sole shareholder. The land was subject to a $40,000 mortgage. What is the amount of the distribution?

A -$5,000

B -$20,000

C -$40,000

D -$95,000

4-Limited partners are partners that:

A -have limited liability for the debts of the partnership.

B -have some, but limited, participation in the management of the partnership.

C -take part in the partnership for a limited amount of time.

D -All of the above.

5-When inventory that is contributed to the partnership in exchange for a partnership interest is eventually sold:

A -any gain or loss the partnership recognizes is always ordinary income or loss.

B -any gain or loss the partnership recognizes is ordinary income or loss if the inventory is sold within five years of when it is contributed.

C -any gain or loss the partnership recognizes is determined based on the use of the property by the partnership.

D -any gain or loss the partnership recognizes is ordinary income or loss to the extent of the contributing partner's built-in gain or loss in the property at the time of the contribution.

6 - When computing a partner's tax basis at the end of the year, which of the following adjustments to tax basis is accounted for last?

A -Distributions made by the partnership to the partner.

B -The partner's allocable share of the partnership's losses and deductions.

C -The partner's allocable share of partnership income.

D -The partner's allocable share of the partnership's nondeductible, noncapital items.

7-Which of the following partnership items is not required to be separately stated?

A -Real estate taxes.

B -Charitable contributions.

C -Section 179 expense.

D -Interest income.