1) The total bases of all distributed property in the partner's hands following a nonliquidating distribution is limited to

A. the FMV of the property distributed 

B. the partner's pre distribution basis in his partnership interest 

C. the partnership's bases in the distributed property 

D. the pre distribution FMV of the partner's partnership interest 

 

2) Identify which of the following statements is true.

A. The basis for property distributed by a partnership cannot be increased above the carryover basis amount when it is received by a partner in a non liquidating distribution. 

B. A partner's partnership capital account balance cannot be less than zero. 

C. The length of time a partner owns a partnership interest is relevant when determining the holding period for distributed property. 

D. All are false. 

 

3) Identify which of the following statements is true.

A. The partner's basis in the partnership interest is normally reduced by the FMV of property distributed in a non liquidating distribution. 

B. If a partnership asset with a deferred pre contribution gain is distributed in a non liquidating distribution to the partner who contributed the asset, the pre contribution gain must be recognized by the partner. 

C. When a current distribution from a partnership reduces the basis of the partnership interest to zero, the partner's interest in the partnership is terminated. 

D. All are false. 

 

4) Which one of the following is not one of the corporation-related requirements for S corporation status?

A. The corporation must not have any foreign-sourced income. 

B. The corporation must be a domestic corporation. 

C. The corporation must not be an ineligible corporation. 

D. The corporation must have only one class of stock.  

 

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