DO NOT explain just give the answers ASPA
1-Bob and Lou’s capital accounts are $5,000 and $10,000, respectively. Lou has agreed to an unlimited deficit restoration obligation but Bob has not. The partnership agreement provides for a qualified income offset, maintenance of and liquidation in accordance with capital accounts and that all losses are shared equally (50/50) between Bob and Lou. The 20X1 loss is $15,000. The allocation of the entire 20X1 loss in accordance with the partnership agreement will have economic effect.
Select one:
True
False
2-There can never be a Tier II allocation of nonrecourse debt for property that was acquired by purchase by a partnership.
Select one:
True
False
3-Section 704(c) requires that deductions with respect to contributed property must be allocated to take into account the difference between the property’s basis and FMV at the time of contribution but pre-contribution gain can be allocated in accordance with the partnership agreement.
Select one:
True
False
4-Partnership minimum gain represents the amount of gain the partnership would recognize if the property were sold for the amount of the nonrecourse debt.
Select one:
True
False
5-Julie owns property that is treated as a capital asset in her hands. She contributed a parcel of land (basis $60,000; fair market value $58,000) to a real estate partnership, which will hold it as inventory. After three years, the partnership sells the land for $56,000. The partnership will recognize a $4,000 ordinary loss on sale of the property.
Select one:
True
False
6-Capital accounts are increased by the fair market value of property contributed to the partnership net of liabilities secured by the property that the partnership is considered to assume or take subject to under §752.
Select one:
True
False
7-A partnership’s allocations of income and deductions to the partners are not required to be proportionate to the partners’ percentage ownership of partnership capital, provided the allocations meet the substantial economic effect tests.
Select one:
True
False
8-A partner’s capital account in a partnership can go negative under certain circumstances but their basis in their partnership interest can never go negative.
Select one:
True
False
9-Revaluations may result from the contribution to or distribution from partnerships and affect both the book and tax basis of partnership property.
Select one:
True
False
10-The “traditional method with curative allocations” creates fictitious income and deductions to alleviate “ceiling rule” issues.
Select one:
True
False
11-
An allocation of nonrecourse deductions can create a negative book capital account even for partners that do not agree to an unconditional deficit restoration obligation.
Select one:
True
False
12- Debt of a limited liability company is allocated among LLC members using the nonrecourse debt allocation rules unless an LLC member has personally guaranteed the debt.
Select one:
True
False
13- The provisions of the qualified income offset rules provide that an allocation of losses cannot cause the partner to have a negative capital account but such an allocation can increase an already negative capital account.
Select one:
True
False
14- Considering the three Treasury approved methods of allocations pursuant to §704(c), the remedial method results in a different amount of book depreciation as compared to the other two methods.
Select one:
True
False
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