What is a possible consequence of a partner and a partnership having different year$-$ends?

$$ Income from a partnership must be recognized by the partner in the same time period as it was earned by the partnership.

$$ The partner will recognize his or her share of the partnership's income in a time period earlier than when it was earned.

$$ The partner may elect a different year$-$end if it reflects the natural business cycle

$$ The partner will recognize his or her share of the partnership's income in a time period later than when it was earned.

Which information should be reported in ordinary income from a partnership?

$$ Gross profit on sales

$$ Capital gains

$$ Section $1231$ gains

$$ Items with individual limitations

Individual A joins Partnership AB with Individual B$,$ and Individual A contributes a piece of land with a fair market value of $$50,000$ to the partnership. Individual A$\text{'}$s cost basis for the land is $$80,000.$ Three years later, the land now has a fair market value of $$60,000$ and is sold to an independent third party for its fair market value. Individuals A and B are equal $50\%$ profit$-$loss partners. What is the tax treatment for each partner?

$$ Individual A has a $$20,000$ precontribution loss while Individual B is allocated $$10,000$ of post contribution gain.

$$ Individual A has a $$20,000$ precontribution loss while Individual B is allocated $$60,000$ of gain.

$$ Individual A has a $$20,000$ precontribution loss while Individual B is allocated no gain or loss.

$$ Individual A has a $$30,000$ precontribution loss while Individual B is allocated $$50,000$ of post contribution gain.

Individual A joins a partnership and contributes land with a fair market value of $$50,000$ and $$10,000$ cash to the partnership. Individual A$\text{'}$s cost basis for the land is $$20,000.$

Three years later, the land is sold for $$60,000.$ From this sale, $$10,000$ is distributed to Individual B$,$ who has a cost basis in the partnership of $$5,000$ after any allocation of gain resulting from the sale of the property.

What is the tax treatment for both partners?

$$ Individual A has a $$40,000$ precontribution gain while Individual B is allocated $$5,000$ of postcontribution gain from the sale and recognizes a $$5,000$ gain from the distribution.

$$ Individual A has a $$30,000$ precontribution gain while Individual B has a $$10,000$ gain from the sale.

$$ Individual A has a $$40,000$ precontribution gain while Individual B has a $$10,000$ postcontribution gain from the sale.

$$ Individual A has a $$30,000$ precontribution gain while Individual B is allocated $$5,000$ of gain from the sale and recognizes a $$5,000$ gain from the distribution.

Use the table below to calculate income tax liability:

Taxable Income Over. But not over The tax is Of the amount over

$$0$ $$50,00015\%$ $$0$

$$50,000$ $$75,000$ $$7,500+25\%$ $$50,000$

$$75,000$ $$100,000$ $$13,750+34\%$ $$75,000$

$$100,000$ $$335,000$ $$22,250+39\%$ $$100,000$

$$335,000$ $$10,000,000$ $$113,900+34\%$ $$335,000$

$$10,000,000$ $$15,000,000$ $$3,400,000+35\%$ $$10,000,000$

$$15,000,000$ $$18,333,333$ $$5,150,000+38\%$ $$15,000,000$

$$18,333,333$ $$6,416,667+35\%$ $$18,333,333$

What is the tax liability for a corporation with taxable income of $$250,000?$

$$ $$37,500$

$$ $$58,500$

$$ $$80,750$

$$ $$119,750$

An individual receives a $20\%$ share in a partnership in exchange for contributing some property with a fair market value of $$80,000$ to the partnership. The property had a $$25,000$ basis to the partnership, and the partnership also assumes the individual's $$11,000$ in liabilities related to the purchase of the property.

What is the individual's basis in the partnership if the partnership had $$40,000$ in liabilities prior to this transaction?

$$ $$24,200$

$$ $$33,000$

$$ $$41,800$

$$ $$10,200$

An individual who runs a solo practice agrees to merge his business with a large partnership in return for a $15\%$ share in the partnership. The individual's solo practice has a fair market value of $$300,000$ and $$200,000$ basis to the individual. The partnership also assumes the individual's $$90\mathrm{.}000$ in liabilities related to the solo practice.

What is the individual's basis in the partnership if the partnership had $$1,000,000$ in liabilities prior to this transaction?

$$ $$373\mathrm{.}500$

$$ $$273\mathrm{.}500$

$$ $$450\mathrm{.}000$

$$ $$350,000$

Which type of service contribution should a partnership capitalize?

$$ Accounting foes for a waste reclamation partnership

$$ Survey costs for a real estate partnership

$$ Management fees for a general construction partnership

$$ Legal fees for a retail partnership

A calendar year$-$end partnership consisting of Partners A$,$ B$,$ and C made it$$s only no liquidating distribution for the year on December $31.$

Each partner will receive $$35,000$ in cash. Partner A has an outside basis of $$45,000.$ Partner B has an outside basis of $$35,000,$ and Partner C has an outside basis of $$25,000.$

Which partner will report a capital gain?

$$ Partner A

$$ Partner B

$$ Partner C

$$ None of the partners