PARTNERSHIP PREPARATION, BASIS CALCULATIONS & DISTRIBUTIONS

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PARTNERSHIP PREPARATION, BASIS CALCULATIONS & DISTRIBUTIONS–FORM 1065 SCHEDULE K & K-1 ANALYSIS

Tuesday, August 25, 2020

4.1 (7)

Presenter :J. Patrick Garverick, CFP, CPA

Company :THE GARVS LLC

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Course Details

Overview of Topics

Partnership Formation8 mins
Traditional Method39 mins
Distributions To Contributing Partners Within 7 Years72 mins
Capital Account Overview101 mins
Net Invest Income157 mins
QBI Aggregation Rules195 mins
Substantiality226 mins
Case Study - Recourse Debt - Guarantee Limited Partner270 mins
Case Study - Partner Basis Calculation323 mins
Tax Treatment to Partner352 mins
Overview of At-Risk Rules378 mins

Course Description

This comprehensive training is designed to get the accountant up to speed quickly with partnership and limited liability company (LLC) formation and preparation issues as well as a complete understanding of calculating a partner and LLC member’s basis. The cornerstone of this course is the in-depth line-by-line analysis of the Form 1065 Schedule K and K-1 and how these items affect the partner/member’s individual income tax return. Each attendee will receive the most comprehensive reference manual with numerous practice aids and real-world examples and case studies.

MAJOR TOPICS COVERED :

An extensive review of the partnership tax laws with an emphasis on any new legislative changes (SECURE & CURES Act)
Review the Form 1065 to learn how income statement items get reported on the partnership/LLC tax return (i.e. page 1 versus Schedule K) and flow-thru to the partner/members on Schedule K-1
Analyze the Schedule K-1 line-by-line and discuss where the items get reported on the individual’s Federal income tax return and how the items affect the partner/member’s outside basis
Look at what relevant information related to the 3.8% net investment income tax needs to be reported to the partners/members
Formation issues including the mandatory allocation of the §704(c) pre-contribution gain or losses back to the contributing partner/member
The purpose of tax and §704(b) book capital account
Reporting recourse and non-recourse debt on the Schedule K-1
Tax ramifications and reporting of cash and non-cash distributions including disproportionate distributions of “hot assets”
Overview of the §754 election for optional basis adjustments triggering §743 (transfer of interests) and §734 (distributions)

J. Patrick Garverick is one of the most admired and best-reviewed Tax Speaker in the country and we are offering the classes at a much-discounted price during the pandemic. His courses have been best-reviewed time and again

For Quality of Content
For Relevance and Practical Case studies
For Best Teaching Approach
For Best Course Material

Awards and Accolades

Award for Instructor Excellence for California Education Foundation
Award for Outstanding Course materials for California Education Foundation.
Rated top tax instructor in nearly every location he has presented
One of the few instructors to have received perfect scores (multiple times) from attendees for both presentation skills and knowledge.

After registering for this webinar you will get Free E-Book worth $200. The book would be emailed to you, a day before the webinar on your registered email address on myCPE. The book is copyright protected.

Webinar Qualifies for

8 CPE credit of Taxes for all CPAs
8 CE credit of Federal Tax Update for Oregon Tax Preparers
8 CE credit of Federal Tax Update for Enrolled Agents ( IRS Approved : GEHNZ )
8 CE credit of Federal Tax Law Update for California Tax Professionals (CTEC Approved-6273)
8 CE credit of Federal Tax for Maryland Tax Preparers
8 General Educational credit for Tax Professionals/Bookkeepers/Accountants

Learning objectives

Form a partnership and calculate the partnership’s initial inside basis in the assets and partner’s outside basis in the entity
Prepare a basic partnership (Form 1065) Schedule K including the reporting of cash and non-cash distributions
Understand how the schedule K items get allocated to the partners/members on their individual Schedule K-1
List the three main reasons for calculating a partner/member’s basis in a partnership/LLC
Calculate a partner/member’s outside basis and determine if losses and deductions are limited on their individual income tax return

About Presenter

J. Patrick Garverick, CFP, CPA

Accounting Manager,THE GARVS LLC

pat@phoenixbeach.com

Pat Garverick is a Certified Public Accountant who currently lives in the Phoenix, Arizona area. He began his career in public accounting in 1988 after obtaining his Bachelor of Science in Business Administration (BSBA) in Accounting from The Ohio State University. After receiving his Master of Taxation (MT) degree from Arizona State University in 1992, Mr. Garverick began operating his own tax and financial planning business. He also started writing, reviewing, and teaching tax and financial planning continuing professional education courses around the country.

In addition to being a CPA, Pat is also a Certified Financial Planner (CFP®). This role serves to enhance the knowledge he brings as he writes and presents continuing education material. Mr. Garverick is a member of the Arizona Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Pat has presented continuing education sessions throughout the country and has won awards for both his skills as an instructor as well as for the content he has created. His knowledge, expertise, and high energy have made him one of the profession’s most highly rated speakers. He is in a very small group of instructors that are both extremely knowledgeable and interesting.

During his time in college, Pat earned a letter as a member of the Ohio State Basketball squad. He remains a staunch supporter of the sports programs at his alma mater.

Awards & accolades

Multi-time winner of the California Education Foundation’s 1) Award for Instructor Excellence and 2) Award for Outstanding Course materials
Rated top tax instructor in nearly every location he has presented
One of the few instructors to have received perfect scores (multiple times) from attendees for both presentation skills and knowledge.

THE GARVS LLC

www.phoenixbeach.com

Phoenix Beach was developed to provide comprehensive and up-to-date educational content for business professionals of all types. As part of our mission we strive to make sure that the material we present is delivered by knowledgeable and skilled instructors so our session participants receive a great educational experience and value.

Review Questions

Question 1 : 00:15
Question 2 : 00:30
Question 3 : 00:45
Question 4 : 01:00
Question 5 : 01:15
Question 6 : 01:30
Question 7 : 01:45
Question 8 : 02:00
Question 9 : 02:15
Question 10 : 02:30
Question 11 : 02:45
Question 12 : 03:00
Question 13 : 03:15
Question 14 : 03:30
Question 15 : 03:45
Question 16 : 04:00
Question 17 : 04:15
Question 18 : 04:30
Question 19 : 04:45
Question 20 : 05:00
Question 21 : 05:15
Question 22 : 05:30
Question 23 : 05:45
Question 24 : 06:00

Review Questions
Final Quiz

Which one of the following is loss limitation?
- Partner’s outside basis (Sec.704(d))
  The inside basis is the partnerships tax basis in the individual assets. The outside basis is the tax basis of each individual partners interest in the partnership. When a partner contributes property to the partnership, the partnerships basis in the contributed property is equal to its fair market value (FMV).
- At risk rules (Sec.465)
  At-risk rules are tax shelter laws that limit the amount of allowable deductions that an individual or closely held corporation can claim for tax purposes as a result of engaging in specific activities–referred to as at-risk activities–that can result in financial losses.
- Any other limitations at the individual level on the Form 1040
  Any other limitations at the individual level as stated in the Form 1040.
- All of the above
  Above mentioned all are the loss limitations.
How much a member required interest in capital to own a partnership through merger or consolidation?
- 20%
  In the case of the merger or consolidation of two or more partnerships, the resulting partnership will be considered the continuation of any merging or consolidating partnership whose members own an interest of more than 50% in the capital and profits of the resulting partnership.
- 50%
  In the case of the merger or consolidation of two or more partnerships, the resulting partnership will be considered the continuation of any merging or consolidating partnership whose members own an interest of more than 50% in the capital and profits of the resulting partnership.
- 30%
  In the case of the merger or consolidation of two or more partnerships, the resulting partnership will be considered the continuation of any merging or consolidating partnership whose members own an interest of more than 50% in the capital and profits of the resulting partnership.
- 40%
  In the case of the merger or consolidation of two or more partnerships, the resulting partnership will be considered the continuation of any merging or consolidating partnership whose members own an interest of more than 50% in the capital and profits of the resulting partnership.
The books and records of the partnership may record the capital accounts based on:
- Tax Accounting Rules
  Tax accounting is a structure of accounting methods focused on taxes rather than the appearance of public financial statements. Tax accounting is governed by the Internal Revenue Code, which dictates the specific rules that companies and individuals must follow when preparing their tax returns.
- Generally Accepted Accounting Principles (GAAP)
  GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. GAAP aims to improve the clarity, consistency, and comparability of the communication of financial information.
- Capital account maintenance rules under the section 704(b) regulation (Book).
  The Sec. 704(b) capital account maintenance rules require the partnership to credit a partners capital account with the amount of cash or net fair market value (FMV) of property invested in the partnership.
- All of the above
  Section 1366 (d) (2) provides an indefinite carryover of losses and deduction that are disallowed because of insufficient basis. Such disallowed losses and deductions are to be treated as incurred by the S corporation in the succeeding taxable year with respect to the shareholder.
“Daddy Warbucks dies when the fair market value of his 60% capital and profits interest in Buckeye, LLC is $900,000. Larry, Curly & Moe each inherit 20% of the capital and profits of Buckeye and take a basis in them of $300,000 each” Known as which interest?
- Inherited interest
  In general, the basis of property inherited will be equivalent to the fair market value of the property at the date of the decedent’s death.
- Capital Interest
  Capital interest is a financial interest in a company. A capital interest holder shares both the profits and losses of the partnership. Capital interest is often determined by: A members initial contribution to the capital of the business. The total amount of all financial contributions to the business.
- Variable Interest
  A variable interest rate (sometimes called an “adjustable” or a “floating” rate) is an interest rate on a loan or security that fluctuates over time because it is based on an underlying benchmark interest rate or index that changes periodically.
- None of the above
  In general, the basis of property inherited will be equivalent to the fair market value of the property at the date of the decedent’s death.
Which are the examples of organizational costs?
- Cost of temporary directors
  The cost of temporary directors are organizational costs.
- Cost of organizational meetings
  The cost organizational meetings are organizational costs.
- State fees
  State fees are the organizational costs.
- All of the above.
  Above mentioned all are the organizational costs.
Which one of the following are elections made by each partner separately?
- Relating to income from discharge of indebtedness
  Relating to income from discharge of indebtedness elections are made by each partner separately.
- Relating to deduction and recapture of certain mining exploration expenditures
  Relating to income from discharge of indebtedness elections are made by each partner separately.
- Relating to taxes of foreign countries and possessions of the United States
  Relating to taxes of foreign countries and possessions of the United States elections are made by each partner separately.
- All of the above
  Above mentioned all are elections are made by each partner separately.
What is included in qualified spousal property?
- Outright transfer property
  §1022(c)(3) defines the term qualified spousal property as Outright transfer property, and Qualified terminable interest property (QTIP).
- Qualified terminate interest property (QTIP)
  §1022(c)(3) defines the term qualified spousal property as Outright transfer property, and Qualified terminable interest property (QTIP).
- Both A and B
  §1022(c)(3) defines the term qualified spousal property as Outright transfer property, and Qualified terminable interest property (QTIP).
- None of the above
  §1022(c)(3) defines the term qualified spousal property as Outright transfer property, and Qualified terminable interest property (QTIP).
To whom remedial items is not affected?
- Effect on partnership
  Remedial items do not affect the partnerships computation of its taxable income under §703 and do not affect the partnerships adjusted tax basis in partnership property.
- Effect on partners
  Remedial items are notional tax items created by the partnership solely for tax purposes and do not affect the partners book capital accounts. Remedial items have the same effect as actual tax items on a partners tax liability and on the partners adjusted tax basis in the partnership interest.
- Both A and B
  Remedial Items does not affects partnership and partners.
- None of the above
  Remedial Items does not affects partnership and partners.
Which one of the following increases Stock Basis?
- Capital contribution
  A capital contribution is the financing of a company (individual or partnership) by the business owner themselves, or by the companys shareholders from their personal assets. There are no direct advantages for the depositors.
- Taxable Income
  Taxable income refers to the base upon which an income tax system imposes tax. Generally, it includes some or all items of income and is reduced by expenses and other deductions. The amounts included as income, expenses, and other deductions vary by country or system.
- Tax – free income
  Tax free refers to certain types of goods and financial securities (such as municipal bonds) that are not taxed. It also refers to earnings that are not taxed.
- All of the above
  Above stated all are the increases stock basis.
When an exclusion from gross income provides for COD income?
- Bankruptcy
  IRC section 108(a) provides an exclusion from gross income for COD income if the discharge occurs in a title 11 bankruptcy case.
- Insolvent
  IRC section 108(a) provides an exclusion from gross income for COD income if the discharge occurs in a title 11 bankruptcy case.
- Both A and B
  IRC section 108(a) provides an exclusion from gross income for COD income if the discharge occurs in a title 11 bankruptcy case and when the taxpayer is insolvent.
- None of the Above
  IRC section 108(a) provides an exclusion from gross income for COD income if the discharge occurs in a title 11 bankruptcy case and when the taxpayer is insolvent.
Which are reasonable allocation method for pre-contribution gain or loss?
- Traditional method
  Traditional costing is the allocation of factory overhead to products based on the volume of production resources consumed. Under this method, overhead is usually applied based on either the amount of direct labor hours consumed or machine hours used.
- Traditional method with curative allocation
  Using curative allocations, partnerships may allocate tax items of income, deduction, gain, or loss that differ from the allocation of the Sec. A partnership may limit its curative allocations to allocations of one or more particular tax items.
- Remedial allocation method
  It simply creates tax allocations the noncontributing partners need in order to match their Sec. 704(b) book allocations. The opposite of these allocations is offset against the contributing partner. These allocations only affect tax, not Sec.
- All of the above
  Above stated all are reasonable allocation method.
To whom at risk rules is not applied?
- Qualified C Corporation ($465 (c) (7)
  A qualified C corporation is a closely held corporation, defined earlier, that is NOT A personal holding company (as defined in §542(a)), or A personal service corporation (as defined in §269A (b)), but determined by substituting 5% for 10%.
- Trusts
  A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries.
- Estates
  An estate, in common law, is the net worth of a person at any point in time alive or dead. It is the sum of a persons assets – legal rights, interests and entitlements to property of any kind – less all liabilities at that time.
- Certain closely held C Corporation (defined in $542(a)(2).
  A closely held corporation is a corporation that: Has more than 50% of the value of its outstanding stock owned (directly or indirectly) by 5 or fewer individuals at any time during the last half of the tax year, and. Isn\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'t a personal service corporation.
A ___________________________ balance indicates a predominant money flow outbound from a country to other countries.
- Positive Capital Account
  A countrys balance of payments is made up of its current account, capital account, and financial account. Positive capital and financial accounts mean a country has more debits than credits making it a net debtor to the world.
- Negative Capital Account
  A negative capital account balance indicates a predominant money flow outbound from a country to other countries.
- Both A and B
  A negative capital account balance indicates a predominant money flow outbound from a country to other countries.
- None of the above
  A negative capital account balance indicates a predominant money flow outbound from a country to other countries.
The _________________ is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.
- Book Value
  Book value refers to the total amount a company would be worth if it liquidated its assets and paid back all its liabilities. Book value can also represent the value of a particular asset on the companys balance sheet after taking accumulated depreciation into account.
- Fair Market Value
  The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.
- Terminal Value
  Terminal value (TV) is the value of a business or project beyond the forecast period when future cash flows can be estimated. Terminal value assumes a business will grow at a set growth rate forever after the forecast period. Terminal value often comprises a large percentage of the total assessed value.
- All of the above
  The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.
The amount a taxpayer is at risk in an activity at the close of a taxable year of the taxpayer is determined by:
- Reducing
  Reducing the amount at risk in the activity at the close of the preceding taxable year by the amount of the §465(d) loss which was allowed as a deduction in the preceding taxable year.
- Increasing
  Increasing the amount at risk in the activity by all factors occurring during the taxable year which increase the amount at risk (e.g., contributions of money or property, taxpayer’s share of taxable or tax-exempt income and increases in a partner’s share of recourse liabilities).
- Decreasing
  Decreasing the amount at risk in the activity by all factors occurring during the taxable year which decrease the amount at risk (e.g., distributions of money or property, taxpayer’s share of deductible and non-deductible expenses and/or losses and decreases in a partner’s share of recourse liabilities).
- All of the above
  Above mentioned all are the determined by the amount a taxpayer is at risk in an activity at the close of a taxable year.
What are the different adjustment to basis of partnership property?
- Positive adjustment
  A partnership increases the adjusted basis of partnership property by the excess of the transferees basis for the transferred partnership interest (i.e. O/S basis) over and the transferees share of the adjusted basis to the partnership of the partnerships property (i.e. I/S basis).
- Negative adjustment
  A partnership increases the adjusted basis of partnership property by the excess of the transferees basis for the transferred partnership interest (i.e. O/S basis) over and the transferees share of the adjusted basis to the partnership of the partnerships property (i.e. I/S basis).
- Both A and B
  Positive adjustment and negative adjustment both are the different adjustment basis of partnership property.
- None of the above
  Positive adjustment and negative adjustment both are the different adjustment basis of partnership property.
What are the different type of leave credits?
- Paid Sick Leave Credit
  The Families First Coronavirus Response Act (the FFCRA), signed by President Trump on March 18, 2020, provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.
- Paid Family Leave Credit
  The Families First Coronavirus Response Act (the FFCRA), signed by President Trump on March 18, 2020, provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.
- Both A and B
  Paid sick leave credit and paid family leave credit are the different types of credits which is available for employees in the situation of COVID -19.
- None of the above
  Paid sick leave credit and paid family leave credit are the different types of credits which is available for employees in the situation of COVID -19.
When inventory items of the partnership are considered to have appreciated substantially in value?
- Fair market value exceeds 120%
  For §751(b), only substantially appreciated inventory is considered a Hot Asset. Inventory items of the partnership are considered to have appreciated substantially in value if their fair market value exceeds 120% of the adjusted basis to the partnership of such property.
- Fair market value exceeds 100%
  For §751(b), only substantially appreciated inventory is considered a Hot Asset. Inventory items of the partnership are considered to have appreciated substantially in value if their fair market value exceeds 120% of the adjusted basis to the partnership of such property.
- Fair market value exceeds 75%
  For §751(b), only substantially appreciated inventory is considered a Hot Asset. Inventory items of the partnership are considered to have appreciated substantially in value if their fair market value exceeds 120% of the adjusted basis to the partnership of such property.
- Fair market value exceeds 50%
  For §751(b), only substantially appreciated inventory is considered a Hot Asset. Inventory items of the partnership are considered to have appreciated substantially in value if their fair market value exceeds 120% of the adjusted basis to the partnership of such property.
Which is nondeductible expenses?
- Illegal bribes
  Bribery, which is the offer of money or gifts in exchange for specific influences or treatments, is something that is often illegal.
- Kickbacks
  A kickback is a form of negotiated bribery in which a commission is paid to the bribe-taker in exchange for services rendered. Generally speaking, the remuneration (money, goods, or services handed over) is negotiated ahead of time.
- Fines & Penalties
  The Code says that no deduction can be taken for any fine or similar penalty paid to a government for the violation of any law. Even if called a fine or penalty, they may be paid into a fund to be used for remediation. Such amounts are really more like damages or restitution, so they are allowable as deductions.
- All of the above
  Above mentioned all the nondeductible expenses.
Who is required to file Form 6198?
- Individuals
  An individual is that which exists as a distinct entity. Individuality is the state or quality of being an individual; particularly of being a person separate from other people and possessing their own needs or goals, rights and responsibilities.
- Estates
  An estate, in common law, is the net worth of a person at any point in time alive or dead. It is the sum of a persons assets – legal rights, interests and entitlements to property of any kind – less all liabilities at that time.
- Trusts
  An estate, in common law, is the net worth of a person at any point in time alive or dead. It is the sum of a persons assets – legal rights, interests and entitlements to property of any kind – less all liabilities at that time.
- All of the above
  Above mentioned all the factors are required to file Form 6198.
Which activity income of property shall be treated as not from a passive activity?
- Leasing equipment
  Obtaining the use of machinery, vehicles or other equipment on a rental basis. This avoids the need to invest capital in equipment. Ownership rests in the hands of the financial institution or leasing company, while the business has the actual use of it and such income of property shall be treated as not from a passive activity.
- Any gain from sale of property
  Any gain from the sale, exchange, or other disposition of the item of property is included in the taxpayers income for the taxable year then it shall be treated as not from a passive activity.
- Real Estate rentals
  A property from which the owner receives payment from the occupant(s), known as tenants, in return for occupying or using the property. Rental properties may be either residential or commercial and such income of property shall be treated as not from a passive activity.
- Home rentals
  A property from which the owner receives payment from the occupant(s), known as tenants, in return for occupying or using the property. Rental properties may be either residential or commercial such income of property shall be treated as not from a passive activity.
A tax payer must file a Form 6198 if:
- Any activity covered by at risk rules and are not at risk
  A taxpayer must file a Form 6198 if they have a loss from any part of an activity that is covered by the at-risk rules and are not at risk for some of the investment in the activity.
- Engaged in activity in carrying trade or business
  A taxpayer must file a Form 6198 if they are engaged in an activity in carrying on a trade or business or for the production of income and have borrowed amounts not at-risk.
- Both A or B
  A taxpayer must file a Form 6198 if they have a loss from any part of an activity that is covered by the at-risk rules and are not at risk for some of the investment in the activity or they are engaged in an activity in carrying on a trade or business or for the production of income and have borrowed amounts not at-risk.
- None of the above
  A taxpayer must file a Form 6198 if they have a loss from any part of an activity that is covered by the at-risk rules and are not at risk for some of the investment in the activity or they are engaged in an activity in carrying on a trade or business or for the production of income and have borrowed amounts not at-risk.
Which form is used for partnership income to file U.S. Income tax return?
- Form 1165
  This form is used for receipt for cash-sub voucher.
- Form 1065
  This form is used for partnership income to file U.S. Income tax return.
- Form 1099
  Information about Form 1099-MISC, Miscellaneous Income, including recent updates, related forms and instructions on how to file.
- Form 8582
  Form 8582 is used by non-corporate taxpayers to figure the amount of any passive activity loss (PAL) for the current tax year and to report the application of prior year unallowed PALs.
Which schedule is used for information with regard to partners owning 50% or more of partnership?
- Schedule C – 1 of Form 1065
  Schedule C – 1 of Form 1065 is used for information with regard to partners owning 50% or more of partnership.
- Schedule B – 1 of Form 1065
  Schedule B – 1 of Form 1065 is used for information with regard to partners owning 50% or more of partnership.
- Schedule D – 1 of Form 1065
  Schedule D – 1 of Form 1065 is used for information with regard to partners owning 50% or more of partnership.
- Schedule F – 1 of Form 1065
  Schedule F – 1 of Form 1065 is used for information with regard to partners owning 50% or more of partnership.

Minimum 70% Questions answer should be right.

What is the full form of PPP?
- Payment Protection Program
- Paycheck Protection Program
- Paycheck Protected Program
- Paycheck Protection Period
Which from is used for disclosure of bottom dollar payment obligation?
- Form 8275
- Form 8269
- Form 8298
- Form 671
When transfers presumed to be sale?
- Made within 2 Year
- Made within 6 Months
- Made within 1 Year
- None of the above
Which form is used for information on partners owning 50% or more of the partnership?
- Form 1065
- Form 1099 - MISC
- Form 5882
- Form 2858
Which deductions shall not be allowed to the partnership?
- Deductions for personal exemptions provided in §151
- Deductions for charitable contributions provided in §170
- Net operating loss deductions provided in §172
- All of the above
A service partnership is a partnership substantially all the activities of which involve the performance of services in the fields of:
- Health
- Law
- Engineering
- All of the above
Distribution in excess of stock basis are taxed as_______________.
- Capital Gain
- Capital Loss
- Financial Loss
- None of the above
What is the threshold limit for married filing jointly?
- $350,000
- $250,000
- $400,000
- $500,000
Loss is recognized to a partner only upon liquidation of his entire interest in the partnership, and only if the property distributed to him consists solely of:
- Money
- Unrealized receivables
- Inventory Items
- All of the above
Payments made in liquidation of the interest of a retiring partner or a deceased partner shall, except as provided in below (§736(b)), be considered -
- As a distributive share to the recipient of partnership income if the amount thereof is determined with regard to the income of the partnership.
- As a guaranteed payment described in §707(c) if the amount thereof is determined without regard to the income of the partnership.
- Both A or B
- None of the above
In which section unrealized receivables defined?
- $751(A)
- $751(C)
- $751(D)
- $751(B)
Which assets are considered Hot Assets and could result in sale or exchange tax treatment if they are distributed to the partners in proportion to their ownership interests?
- Unrealized receivables of the partnership
- Substantially appreciated inventory items of the partnership
- Both A and B
- None of the above
How do you liquidate a partnership?
- Sell non cash assets for cash
- Pay any liabilities of the partnership
- Distribute the remaining cash to the partners using the capital ratio
- All of the above
Where separately computed items are reported?
- Schedule K of the Form 1065
- Schedule L of the Form 1065
- Schedule D of the Form 1065
- Schedule F of the Form 1065
A qualified C corporation is a closely held corporation, defined earlier, that is NOT:
- A personal holding company (as defined in §542(a))
- A personal service corporation (as defined in §269A (b)), but determined by substituting 5% for 10%.
- Both A or B
- None of the Above
The at-risk rules apply to any taxpayer engaged in the activity of:
- Personal service income
- farming
- Portfolio income
- Income from intangible property
As per the special rules payments in exchange for an interest in partnership property shall not include amounts paid for:
- Unrealized receivables of the partnership (as defined in §751(c))
- Goodwill of the partnership, except to the extent that the partnership agreement provides for a payment with respect to goodwill
- Both A and B
- None of the above
Startup and organizational expenditures that are not deductible in the year in which trade or business begins would be amortized over a ___-year period consistent with the amortization period for §197 intangibles.
- 15 Years
- 12 Years
- 10 Years
- 8 Years
What are the exception in which rules under sec. 751 (b) (1) shall not apply?
- Draws or advances against a partners distributive share
- Distributions that are gifts
- Payments for the use of capital
- All of the above
Which form would you use to report sale of partnership interest?
- Form 8958
- Form 3808
- Form 8308
- Form 8529
Which of the taxpayer’s activity shall be treated as separate activity?
- Film or video tape
- Oil and gas property
- Geothermal property
- All of the above
What is rate of Medicare contribution tax?
- 3%
- 3.80%
- 2.5%
- 6%
What is included in marketable securities?
- Interests in a common trust fund, or a regulated investment company that is offering for sale or has outstanding any redeemable security of which it is the issuer.
- Any financial instrument which under its terms or any other arrangement is readily convertible into, or exchangeable for, cash or marketable securities.
- Both A and B
- None of the above
Which form is used for calculate your total net investment income?
- Form 8994
- Form 4989
- Form 8960
- Form 8949
What is the maximum LTCG rate for collectible gain?
- 18%
- 28%
- 30%
- 15%
Which form is filed by a partnership to report the sale or exchange by a partner of all or part of a partnership interest where any money or other property received in exchange for the interest is attributable to unrealized receivables or inventory items?
- Form 8308
- Form 8803
- Form 8083
- Form 3808
In the case of a sale or exchange of an interest in a partnership, gain or loss shall be recognized to the transferor partner. The gain or loss realized by the seller is the difference between:
- The amount realized on the sale
- The seller’s outside basis in the partnership
- Both A and B
- None of the above
What is the maximum LTCG rate for unrecaptured section 1250 capital gain?
- 28%
- 18%
- 25%
- 15%
What is included in qualified distribution?
- Qualified annuity plan(§Sec. 403(a))
- Roth IRAs(§408A)
- Both A and B
- None of the above
In which year congress introduced at risk rules?
- 1974
- 1975
- 1976
- 1977
What is other limitations at the individual level on form 1040 included?
- Passive activity losses
- Capital losses
- Charitable contribution
- All of the above
What you mean by “Inventory items”?
- Stock in trade of the taxpayer or other property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year, or property held by the taxpayer primarily for sale to customers in the ordinary cour
- Any other property of the partnership which, on sale or exchange by the partnership, would be considered property other than a capital asset and other than property described in §1231.
- Any other property of the partnership which, if sold or exchanged by the partnership, would result in a gain taxable under §1246(a) (relating to gain on foreign investment company stock).
- All of the above
What is the maximum LTCG rate for residual long term capital gain or loss?
- 28%
- 18%
- 20%
- 25%
Factors which tend to indicate active participation include:
- Actually working in the trade or business
- hiring and discharging employees
- Both A or B
- None of the above
What are the different types of liability?
- Personal Liability
- Partnership Liability
- Both A and B
- None of the above
The tax does not apply to a:
- Non-resident alien
- Trust that is exempt from tax under §501
- Charitable remainder trust exempt from tax under §664
- All of the Above
What is the full form of MAGI?
- Modified Adjusted Gross Investment
- Modified Adjusted Gross Income
- Manual Adjusted Gross Income
- Manual Adjusted Gross Investment
When a taxpayer shall not be considered at risk with respect to amounts protected against loss?
- Non-recourse financing
- Guarantees
- Stop loss agreement
- All of the above
The partnership’s basis in the contributed property is equal to __________________.
- Fair Market Value
- Book Value
- Both A and B
- None of the above
Which form is used for at risk limitations?
- Form 6198
- Form 5829
- Form 5895
- Form 5985

FAQ

myCPE self-study courses are online.
The self-study format allows you to access the material online 24/7 and study at your own pace.
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Complete your final exam at any time and get CPE Credit instantly. You can retake the exam multiple times without any additional charges.
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Sep 28th 2020

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Sep 14th, 2020

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Aug 29th, 2020

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MY-CPE LLC, 1600 Highway 6 South, Suite 250, Sugar Land, TX, 77478

MY-CPE LLC (Sponsor ID# : 6273) has been approved by the California Tax Education Council to offer continuing education courses that count as credit towards the annual “continuing education” requirement imposed by the State of California for CTEC Registered Tax Preparers. A listing of additional requirements to register as a tax preparer may be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, toll-free by phone at (877) 850-2832, or on the Internet at www.ctec.org.

On-Demand Webinars

ACCOUNTANT PREPARED A RETURN AND IT IS UNDER CRIMINAL INVESTIGATION BY THE IRS, NOW WHAT?

Wednesday, October 21, 2020 View Details/Register

GENERALLY ACCEPTED GOVERNMENT AUDITING STANDARDS: THE NEW YELLOW BOOK (LATEST FOR NON-PROFIT)

Thursday, October 15, 2020 View Details/Register

CUTTING THE GORDIAN KNOT: ECHECK FRAUD, MOBILE BANKING FRAUD, CHECK 21 & HOLDER IN DUE COURSE

Tuesday, October 13, 2020 View Details/Register

CYBERSECURITY BASICS FOR ACCOUNTING & TAX COMMUNITY

Monday, October 12, 2020 View Details/Register

Ethics for Wyoming CPAs

Friday, October 09, 2020 View Details/Register

CYBERSECURITY ESSENTIALS FOR TAX PREPARER

Friday, October 09, 2020 View Details/Register

FORENSIC ACCOUNTING : VALUE ADDED SKILL FOR EVERY ACCOUNTANT

Thursday, October 08, 2020 View Details/Register

TAX FIRM MARKETING: 5 ESSENTIAL DIGITAL STRATEGIES FOR UNCERTAIN TIMES

Thursday, October 08, 2020 View Details/Register

COMPREHENSIVE GUIDE TO IDENTITY THEFT WITH CASE STUDIES

Thursday, October 08, 2020 View Details/Register

UNDERSTANDING FRAUD, THE BASICS

Wednesday, October 07, 2020 View Details/Register

NEW CYBER FRAUDS & CYBERSECURITY INTERNAL CONTROLS (POST PANDEMIC)

Wednesday, October 07, 2020 View Details/Register

Accounting Changes and Error Corrections (2 CPE)

Thursday, August 27, 2020 View Details/Register

Corporate External Financial Reporting Decisions

Tuesday, September 29, 2020 View Details/Register

Internal and System Controls

Tuesday, September 29, 2020 View Details/Register

Common Issues with Financial Ratio Analysis

Tuesday, September 29, 2020 View Details/Register

Cost $120
CPE Credits 8
CE Credits 8
IRS Course ID GEHNZ-U-00245-20-S
CTEC Course ID 6273-CE-0252
Subject Area Taxes
Course Level Intermediate
Instructional Method QAS Self Study
Prerequisites None
Advanced Preparation None
Recorded Date August 25 ,2020
Published Date August 25 ,2020
Who should attend? Tax Attorney Tax Practitioners Accountant CPA - Small Firm CPA - Mid Size Firm Tax Pros Tax Firm Young CPA CPA in Business Entrepreneurial CPA Tax Director (Industry) Accounting Practice Owners Senior Accountant Accounts Director Entrepreneurial Accountant Tax Managers Accounting Managers Tax Preparer Staff of Accounting Firm
Handout Material Download Download
Key Terms Download

On-Demand Webinars

ACCOUNTANT PREPARED A RETURN AND IT IS UNDER CRIMINAL INVESTIGATION BY THE IRS, NOW WHAT?

Wednesday, October 21, 2020 View Details/Register

GENERALLY ACCEPTED GOVERNMENT AUDITING STANDARDS: THE NEW YELLOW BOOK (LATEST FOR NON-PROFIT)

Thursday, October 15, 2020 View Details/Register

CUTTING THE GORDIAN KNOT: ECHECK FRAUD, MOBILE BANKING FRAUD, CHECK 21 & HOLDER IN DUE COURSE

Tuesday, October 13, 2020 View Details/Register

CYBERSECURITY BASICS FOR ACCOUNTING & TAX COMMUNITY

Monday, October 12, 2020 View Details/Register

Ethics for Wyoming CPAs

Friday, October 09, 2020 View Details/Register

CYBERSECURITY ESSENTIALS FOR TAX PREPARER

Friday, October 09, 2020 View Details/Register

FORENSIC ACCOUNTING : VALUE ADDED SKILL FOR EVERY ACCOUNTANT

Thursday, October 08, 2020 View Details/Register

TAX FIRM MARKETING: 5 ESSENTIAL DIGITAL STRATEGIES FOR UNCERTAIN TIMES

Thursday, October 08, 2020 View Details/Register

COMPREHENSIVE GUIDE TO IDENTITY THEFT WITH CASE STUDIES

Thursday, October 08, 2020 View Details/Register

UNDERSTANDING FRAUD, THE BASICS

Wednesday, October 07, 2020 View Details/Register

NEW CYBER FRAUDS & CYBERSECURITY INTERNAL CONTROLS (POST PANDEMIC)

Wednesday, October 07, 2020 View Details/Register

Accounting Changes and Error Corrections (2 CPE)

Thursday, August 27, 2020 View Details/Register

Corporate External Financial Reporting Decisions

Tuesday, September 29, 2020 View Details/Register

Internal and System Controls

Tuesday, September 29, 2020 View Details/Register