Ea Business: Ch 14 Partnerships

Front 1

What is the last date to modify a partnership agreement for a particular tax year?

Back 1

Date for filing the partnership return (EXCLUDING extensions)

Front 2

Limited Partnership - What is the general partner liable for?

Back 2

Personally liable for partnership debts

Front 3

Limited Partnership - What is the limited partner liable for?

Back 3

Only what they contributed to the partnership

Front 4

What type of return is Form 1065?

Back 4

Informational return

Front 5

Whatform states each partner’s distributive share?

Back 5

Schedule K-1

Front 6

1065 - When to file?

Back 6

15th day of the 4th month following the end of the calendar year

Front 7

Form 7004?

Back 7

5 month extension of time to file

Front 8

Liquidation at Partner's Death or Retirement - How do you treat their distributive earnings

Back 8

a. Include the partnership income through the endof the month in which they died as self-employmentincome

b. If theydied part way though the year, add that income to their prior year distributiveearnings

Front 9

How is a partnership distribution treated?

Back 9

TAx free return of capital

Front 10

How is a guaranteed distribution to a partner treated?

Back 10

DEDUCTION

Front 11

Filing Penalties - Failure to Furnish K-1 to Partner

Back 11

$100 for each Schedule K-1 for which failure occurs

Intentional disregard = GREATER of

$250 or 10% of amount to be reported

Front 12

Filing Penalties - Late Filing

Back 12

$195 for each month or part of month (max 12)

multiplied by # of partners (during any part of the yr)

Front 13

basis limits-what share of a partnership loss can a partner generally claim?

Back 13

Only a loss up to the adjusted basis of her partnership interest

Front 14

Basis limits- how long may a partner carryforward disallowed losses and deductions due to the basis limit?

Back 14

Indefinitely

Front 15

How are unrealized receivables and inventory items treated?

Back 15

Taxed as ordinary income

Front 16

Basis for unrealized receivables (cash accounting)?

Back 16

0

Front 17

Partnership Distributions to Partners - must a partner pay taxes on the distributive share if the income is not distributed?

Back 17

Yes

Front 18

Partnership Distributions to Partners - how is a distribution generally treated?

Back 18

Tax-free return of capital to the partner

Front 19

Partnership Distributions to Partners - when does a partner recognize gain?

Back 19

Money included in the distribution exceeds the adjusted basis of the partnership interest

Front 20

Partnership Distributions to Partners - basis for distributed property?

Back 20

Adjusted basis to the partnership immediately before distribution

But--never more than the adjusted basis of her interest in the partnership, reduced by any money received in the same transaction

Front 21

Partnership Distributions to Partners - limit on basis for distributed property?

Back 21

Yes

Cannot be more than the adjusted basis of the partner's interest in the partnership--reduced by any money received in the same transaction

Front 22

Partnership Distributions to Partners - liquidating distributions

When does a partner recognize loss on the distribution?

Back 22

1. Partner's entire interest is liquidated

2. Adjusted basis of the partner's interest in the partnership exceeds the distribution

3. Distribution is in Money, unrealized receivables, or inventory items.

(No loss is recognized if any other property is distributed)

Front 23

Partnership Distribution to Partners- order of allocation of basis?

Back 23

1. Unrealized receivables and inventory items

2. Properties--equal to the partnership's adjusted basis on the property

Front 24

Guarnteed Payments - subject to income tax WH?

Back 24

No

Front 25

Treatment of Health insurance premiums paid for partners?

Back 25

Guaranteed payments

Front 26

What is the basis of a partnership interest?

Back 26

$ + AB of any property contributed

Front 27

Which 3 items increase a partner's basis in the partnership interest?

Back 27

1. Additional contributions to the partnership (includes assumption of partnership liabilities)

2. Partner's distributive share of taxable and nontaxable partnership income

3. The partner's distributive share of the excess of the deductions for depletion over the basis of the property

Front 28

Which 3 items decrease a partner's basis in the partnership interest?

Back 28

1. Money and adjusted basis of property distributed to the partner

2. Partner's distributive share of the partnership losses

3. Partner's share of nondeductible partnership expenses that are not capital expenditures

4. Partner's deduction for depletion for any partnership oil and gas wells

Front 29

When does a partner's basis in a partnership include his share of a partnership liability?

Back 29

If the liability:

1. Creates or increases the partnership's basis in any of its assets

2. Gives rise to a current deduction to the partnership, or

3. Is nondeductible, noncapital expense of the partnership

Front 30

Disposition of Partner's Interest: liquidation at partner's retirement or death

In exchange for her interest in partnership property?

Back 30

Treated as a distribution

Front 31

What is a guaranteed payment?

Back 31

Amount by which the minimum payment is MORE than partner's distributive share of partnership income