21. James has a 30% interest in the XY partnership. In the current year, the partnership has sales of $2,400,000, cost of goods sold of $1,300,000, and $300,000 in operating expenses. James withdrew $75,000 from the partnership during the year, but his partner did not withdraw anything.

a. James must report $240,000 gross income from the partnership for the year.

b. The partnership is taxable on $800,000 for the year and James must include $75,000 in gross income.

c. James must report $75,000 gross income from the partnership for the year.

d. James is not required to recognize any income from the partnership for the year.

e. None of the above.

22. Which of the following is a requirement for alimony deductions under post-1984 decrees and agreements:

a. The payor and the payee must not live in the same household at the time of the payments.

b. The decree must not specify that the payments are not alimony.

c. The payments must end on the death of the payee.

d. The payments must be in cash.

e. All of the above.

23. Freida made a $80,000 interest-free loan to her son, Georgio, who used the money to start a new business. Georgio