Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
31 Cards in this Set
- Front
- Back
|
What is the concept for corportations?
|
the entity concept
|
|
|
What is the concept for partnerships?
|
the aggregate concept
|
|
|
Which partnership does this describe?
each partner has the ability to make commitments for the partnership and has unlimited liability for partnership debts |
General partnerships
|
|
|
Which partnership is where you must have atleast one general partner?
|
Limited partnership
|
|
|
In a limited partnership, the general partner can be an individual or a?
|
corporation
|
|
|
In a limited partnership, the general partner must not be...
|
devoid of any assets (straw man)
|
|
|
In a limited partnership, limited partners have no right to be active in ...
|
partnership management.
|
|
|
In a limited partnership, limited partners are not personally liable for ...
|
partnership liablitlies
|
|
|
In a limited partnership, state law says that what cannot be allowed to operate as a limited partnership?
|
Personal Service businesses (law, accounting, medicine, etc)
|
|
|
Limited Liability companies and limited liability partnerships (llc's and llp's) are what type of entities?
|
Unincorporated
|
|
|
Any unincorporated entity can "check the box" meaning they can...
|
Choose how they wished to be taxed, as a C-corp or a partnership. Most choose to be taxed as partnership. Very few choose C corp and make S election, if they want to be s corp, they should incorporate then make s election.
|
|
|
Which section of the code covers the formation of a partnership?
|
Section 721.
|
|
|
Generally, the formation of a partnership is what kind of transaction?
|
Tax deffered.
|
|
|
In the formation of a partnership, gain will be recognized if the formation constitutes as what?
|
An investment company (which would be taxed as an investment company if incorporated)
|
|
|
Under 721, the partner contributes what in exchange for what?
|
The partner exchanges assets in exchange for a partnership interest.
|
|
|
Under 721, the partner exchanges assets for partnership interest, then the partnership has a carryover basis in the assets also known as an...
|
inside basis
|
|
|
Under 721, the partner contributes assets in exchange for partnership interest, and the partner has a c/o basis in their partnership interest also known as an...
|
outside basis
|
|
|
In the formation of a partnership, when an individual partner takes on some debt of the partnership, then that partners basis is ...
|
increased
|
|
|
In the formation of a partnership, when an individual partners debt is taken on by the partnership, then that individual partners basis is...
|
decreased
|
|
|
In the formation of a partnership, a gain will be recognized upon formation if the trasaction constitutes a ...
|
sale.
|
|
|
The partnerships basis in an asset equals...
|
the partners basis before adding in stuff
|
|
|
Unrealized receivables always remains...
|
ordinary income/loss item
|
|
|
If asset is inventory in hands of partner then...
|
it takes five years for it to be a capital asset inthe hands of the partnership whether its a gain or a loss asset
|
|
|
If the asset is capital gain asset in the hands of the partner, it takes...
|
zero time for it to become inventory in the hands of the partnership if its a gain asset. (capital gain to ord income takes zero time)
|
|
|
If the asset is a capital loss asset in the hands of the partner, then it takes...
|
five years for the asset to become inventory in hands of partnership (capital loss to ord loss takes 5 years)
|
|
|
If a capital loss asset continues to decline in value then
|
the amount declined can be ordinary loss in the hands of the partnership
|
|
|
Contribution of svc's for ptnship interest results in ...
|
ordinary income.
|
|
|
The contributions of services for a partnership interest could possibly be a what type of interest?
|
Profits only interest
|
|
|
What is a profits only interest?
|
it is an interest that is not currently taxable if the sole asset received is the right to a % of FUTURE profits (not a share of inventory, equipment, buildings, etc)
|
|
|
What happens with organization/syndicate fees?
|
Deduct the first $5000 and amortize the rest. (reduced deduction if expenses exceed $50,000.
|
|
|
What are the three things that determine whether a loss will be deductible?
|
Basis in partnership interest.
At-risk basis in partnership interest, and passive activity loss limits |
