. Which one of the following is not true about partnerships? (Points : 1)

There must be 2 or more owners. General partners assume more risk of legal liability than limited partners. A Limited Liability Corporation ("LLC") limits certain liability risks. A partnership is taxed like a corporation. All of the other choices are true.

Question 2.2. Which of the following statement is true about partnerships? (Points : 1)

The formation of a partnership must be documented in writing. A LLC is generally treated as a partnership for tax law purposes. General partners have no liability for partnership obligations beyond their capital contributions. When Sue & Billy Bob invest in land together, they are considered to have formed a partnership.

Question 3.3. On July 1, 2014, Bertram acquired a 25% interest in Sycamore Company, a partnership, by contributing property with an adjusted basis of $7,000 and a fair market value ("FMV") of $12,000. The property was subject to a mortgage of $8,000, which was assumed by Sycamore Company. What is Bertram's basis in his partnership interest in Sycamore Company immediately after the partnership contribution? (Points : 1)

$0 $1,000 $7,000 $12,000 None of the other provided choices

Question 4.4. On July 1, 2014, Ambrose was admitted to partnership in the firm of Ambrose & Nectar. His contribution to capital consisted of 500 shares of stock in Paniculata Corporation, which he bought in 1990 for $10,000 & which had a fair market value of $50,000 on July 1, 2014. Ambrose's interest in the partnership's capital and profits is 25%. On July 1, 2014, the fair market value of the partnership's net assets (after Ambrose was admitted) was $200,000. What is Ambrose's taxable gain in 2014 on the exchange of stock for his partnership interest? (Points : 1)

$0 gain or loss $40,000 ordinary income $40,000 long-term capital gain ("LTCG") $40,000 Section 1231 gain None of the other provided choices

Question 5.5. During 2014, Norman contributed investment property held for over one year to the Mary Ann Partnership for a 40% interest in partnership capital & profits. His tax basis in the property contributed was $8,000, & the property had a FMV of $10,000 on the date of the contribution to the partnership. What gain or loss should Norman report as a result of the contribution of the property to the partnership in exchange for the 40% partnership interest? (Points : 1)

No gain or loss $2,000 long-term capital gain $2,000 ordinary income $10,000 long-term capital gain None of the other provided choices

Question 6.6. Leslie contributes a building worth $88,000, with an adjusted basis of $40,000, to a partnership in exchange for a 50% interest in the partnership's capital & profits. What is the amount of Leslie's basis in her partnership interest immediately after the contribution? (Points : 1)

$20,000 $40,000 $44,000 $88,000 None of the other provided choices

Question 7.7. An equal partnership is formed by Rita & Gerry. Rita contributes cash of $10,000 & a building with a FMV of $150,000, adjusted basis of $55,000, & subject to a liability of $60,000. Gerry contributes cash of $100,000. What amount of gain must Rita recognize as a result of this transaction? (Points : 1)

$95,000 $35,000 $5,000 $0 None of the other provided choices

Question 8.8. An equal partnership is formed by Rita & Gerry. Rita contributes cash of $10,000 & a building with a FMV of $150,000, adjusted basis of $55,000, & subject to a liability of $60,000. Gerry contributes cash of $100,000. What is Rita's basis in her partnership interest immediately after formation of the partnership? (Points : 1)

$25,000 $35,000 $65,000 $70,000 None of the other provided choices

Question 9.9. An equal partnership is formed by Rita & Gerry. Rita contributes cash of $10,000 & a building with a FMV of $150,000, adjusted basis of $55,000 & subject to a liability of $60,000. Gerry contributes cash of $100,000. What is the partnership's basis in the building contributed by Rita? (Points : 1)

$55,000 $60,000 $90,000 $150,000 None of the other provided choices

Question 10.10. Loretta contributes property to a partnership in exchange for a 25% partnership interest. The property contributed has a FMV of $45,000 & a basis of $35,000 on the date of the contribution to the partnership. In addition, Loretta receives a 10% partnership interest, valued at $18,000, in exchange for services rendered to the partnership. What is Loretta's basis in her partnership interest, immediately after these transactions? (Points : 1)

$35,000 $45,000 $53,000 $63,000 None of the other provided choices