Outside basis is adjusted at the end of the tax year. TOR F
. A partner receives a distribution of cash, inventory and avehicle. His outside basis
is first allocated to the inventory, then to the cash and then tothe vehicle. T OR F
Any partnership debt that is allocated to another partner istreated as deemed cash
contribution. T OR F
Bobby owns 60 percent of the stock of ABC Corporation. Unrelatedindividuals
own the remaining 40 percent. For a stock redemption to be treatedas an exchange
under the "substantially disproportionate" rule, the redemptionmust reduce Bobby's
stock ownership below 48 percent T OR F
A partner can apply any passive activity losses against any passiveactivity income
for the year. T OR F
Flow-through S-corporation losses that are not deductible due toloss-limitation
rules are suspended and carried forward for 5 years. TOR F
. A shareholder that engages in a stock redemption will generallyrecognize a capital
gain or loss based on the FMV of the property received for thebasis of the stock
exchanged. T OR F
A partner that receives cash in a non-liquidating distributionrecognizes loss if the
cash distributed is less than the partner's outside basis in thepartnership immediately
before the distribution. T OR F
A partner that receives cash in a non-liquidating distributionrecognizes gain if the
cash distributed exceeds the partner's outside basis in thepartnership immediately
before the distribution. T OR F
Capital accounts reflect a partnerâs value in the partnership, butunlike outside basis,
do not include allocable liabilities in its calculation. T OR F
A complete redemption of stock is always treated as a sale orexchange unless a
waivable activity occurs. T OR F
. Nonrecourse debt is generally allocated according to theprofit-sharing ratios of the
partnership. T OR F
A disproportionate distribution of hot assets is treated asthough the partnership
distributes a proportionate share of hot assets to the partner andthen the partner sells
those hot assets back to the partnership at fair market value inexchange for a portion
of the assets actually received in the distribution. T OR F
A partner recognizes gain when he receives cash in excess of hisoutside basis in a
liquidating distribution. T OR F
Outside basis is adjusted at the end of the tax year. TOR F
. A partner receives a distribution of cash, inventory and avehicle. His outside basis
is first allocated to the inventory, then to the cash and then tothe vehicle. T OR F
Any partnership debt that is allocated to another partner istreated as deemed cash
contribution. T OR F
Bobby owns 60 percent of the stock of ABC Corporation. Unrelatedindividuals
own the remaining 40 percent. For a stock redemption to be treatedas an exchange
under the "substantially disproportionate" rule, the redemptionmust reduce Bobby's
stock ownership below 48 percent T OR F
A partner can apply any passive activity losses against any passiveactivity income
for the year. T OR F
Flow-through S-corporation losses that are not deductible due toloss-limitation
rules are suspended and carried forward for 5 years. TOR F
. A shareholder that engages in a stock redemption will generallyrecognize a capital
gain or loss based on the FMV of the property received for thebasis of the stock
exchanged. T OR F
A partner that receives cash in a non-liquidating distributionrecognizes loss if the
cash distributed is less than the partner's outside basis in thepartnership immediately
before the distribution. T OR F
A partner that receives cash in a non-liquidating distributionrecognizes gain if the
cash distributed exceeds the partner's outside basis in thepartnership immediately
before the distribution. T OR F
Capital accounts reflect a partnerâs value in the partnership, butunlike outside basis,
do not include allocable liabilities in its calculation. T OR F
A complete redemption of stock is always treated as a sale orexchange unless a
waivable activity occurs. T OR F
. Nonrecourse debt is generally allocated according to theprofit-sharing ratios of the
partnership. T OR F
A disproportionate distribution of hot assets is treated asthough the partnership
distributes a proportionate share of hot assets to the partner andthen the partner sells
those hot assets back to the partnership at fair market value inexchange for a portion
of the assets actually received in the distribution. T OR F
A partner recognizes gain when he receives cash in excess of hisoutside basis in a
liquidating distribution. T OR F
