8. Which, if either, of the following statements is or are true? A partnership S

Question

8.        Which, if either, of the following statements is or are true?

A partnership Schedule K-1 to Form 1065 must separately state long-term capital gains and losses but not short-term capital gains and losses.

As a general rule, a partner’s initial basis in his or her partnership interest equals the total of the fair market value of his/her property plus money, if any, contributed by the partner to the partnership.

a.         I only

b.         II only

c.          Both I and II

d.         Neither I nor II

Explanation / Answer

Answer:

b.   II only

Reason: A partnership Schedule K-1 (Form 1065) shows Partner's Share of Income, Deductions, Credits, etc. So, statement I is not true.

Statement II – “As a general rule, a partner’s initial basis in his or her partnership interest equals the total of the fair market value of his/her property plus money, if any, contributed by the partner to the partnership” is true and correct.

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