Question

1. Salaries and wages paid to a partner's spouse or other familymembers do not qualify as business expenses and may not be claimedas a deduction in computing ordinary income.

a. True b. False

2. Partners must report their share of partnership net income ontheir individual tax returns when it is distributed to them.

a. True b. False

3. Every domestic US partnership must file an annual tax return,regardless of its gross or net income.

a. True b. False

4. A net operating loss incurred by an 1120S corporation can beused as a carryback or carryover in computing S corporationincome.

a. True b. False

5. S corporation shareholders are required to report theirdistributive share of the corporation's net income on theirindividual tax returns, regardless of the amount distributed tothem.

a. True b. False

6. A partnership deducts charitable contributions it makesduring the year against partnership ordinary income.

a. True b. False

7. Personal expenses of a partner paid directly by thepartnership are reported by the partnership as separately stateditems.

a. True b. False

8. A limited liability company and a partnership basicallyreceive the same tax treatment.

a. True b. False

9. In a general partnership, all the partners are classified as"general partners," each of whom has unlimited liability for thedebts of the partnership.

a. True b. False

10. A partner's basis in a partnership interest can never bereduced below zero.

a. True b. False