TXX5768

1. 1)ALL OF THE FOLLOWING FACTORS ARE TAKEN INTO ACCOUNT BY THE COURTS IN DETERMINING WHETHER A TAXPAYER HAS MET THE BENEFITS AND BURDENS OF OWNERSHIP TEST FOR REAL PROPERTY EXCEPT:

   A.	Whetherlegal title has passed;
   B.	Whether an equity was acquired in the property;
   C.	Whether the taxpayer bears the risk of loss or damage to the property;
   D.	Whether the taxpayer has a vested right of possession in the property;
   E.	All of the aboveare factors considered by the Courts;

1. 2)Which of the following statements regarding individual and co-tenant ownership of real property is false?

   A.	Individual ownership is often the simplest and least costly way to own and operate real estate.
   B.	Co-ownership of property by joint tenancy or tenants in common isdifferent from apartnership because co-tenants cannot act on behalf of each other withoutspecific authorization by the other co-tenant. Partners, on the other hand may bind all other partners when one partner is acting with respect to partnership property.
   C.	Individual ownership's main disadvantage is unlimited liability arising out of ownership and operation of the property. This liability can be mitigated by liability insurance and careful management of the property.
   D.	Joint tenants of real property do NOT become partnersmerely becausethey carry on a trade or business with the intent to share profits.
   E.	All of the above statements are true.

1. 3)Which of the following statements is false?

   A.	In order to form a general partnership for federal income tax purposes, the partners musthave awritten partnership agreement.
   B.	All limited partnerships must have at least one general partner who is responsible for management ofthe partnershipand who is personally liable for the obligations of the partnership.
   C.	The general partner of a limited partnership can be a corporation.
   D.	Limited partners may lose their limited partner status (and thus lose protection from legal liability in excess of their capital contribution)if they participate in management activities of the partnership
   E.	All of the above statements are true.

1. 4)When a taxpayer contributes real estate or other property to a partnership, the taxpayer must keep track of his or her adjusted basis in the partnership interest that is acquired. All of the following are important taxreasons for taxpayers to account for their basis in their partnership interests except which of the following:

   A.	If a partner sells his partnership interest, the adjusted basis must be known to calculate the taxable gain or loss on the sale.
   B.	The partner's basis in the partnership interest is a ceiling on the amount of losses that canpass through to that partner in a given tax year.
   C.	The partner's basis in his partnership interest sets the limit on the amount of distributions from the partnership that partner may receive in a given tax year without creating a taxable event.
   D.	A partner's basis in his partnership interest determines the tax consequences to that partner when the partnership is liquidated.
   E.	All of the above are important reasons for tracking basis in the partnership interest
   F.	Only A,&B are important reasons for tracking basis in partnership interests.