1. Identify the requirements that must be met in order to aggregate businesses for purposes of the QBI deduction.

2. What is a guaranteed payment? How is it reported on Form 1065 and its various schedules? How is it reported and taxed to the partner (including taxes other than income taxes)? Describe ways in which the tax treatment of a guaranteed payment for services differs from guaranteed payments for use of the partners capital. When preparing a partnership return for a client, how do you think you could determine the classification of its guaranteed payments (services or capital)?

3.

Using the categories in the following legend, classify each transaction as a plus (+) or minus () on Schedule M2 of Form 1120S. An answer might look like one of these: +AAA or OAA.

Legend

Receipt of tax-exempt interest income.

Administrative expenses.

Depreciation recapture income.

Nontaxable life insurance proceeds.

Expenses related to tax-exempt securities.

Charitable contributions.

Business gifts in excess of $25.

Nondeductible fines and penalties.

4.

At a local bank, Jack purchases for $100,000 a five-year CD listing title as follows: Meredith, payable on death to Briana. Four years later, Meredith dies. Briana, Merediths daughter, then redeems the CD when it matures. Discuss the transfer tax consequences if Meredith is:

Jacks spouse.

Jacks ex-spouse.

Jacks girlfriend.