Which of the following is a correct definition of a concept related to partnersh
ID: 2564670 • Letter: W
Question
Which of the following is a correct definition of a concept related to partnership taxation?
a.
A partner’s capital sharing ratio is defined as the percent of partnership profits that will be allocated to the partner.
b.
The partnership’s inside basis is defined as the sum of each partner’s capital account balance.
c.
The entity concept treats partners and partnerships as separate units and gives the partnership its own tax “personality.”
d.
A special allocation is defined as an amount that could differently affect the tax liabilities of two or more partners.
e.
None of these statements is correct.
a.
A partner’s capital sharing ratio is defined as the percent of partnership profits that will be allocated to the partner.
b.
The partnership’s inside basis is defined as the sum of each partner’s capital account balance.
c.
The entity concept treats partners and partnerships as separate units and gives the partnership its own tax “personality.”
d.
A special allocation is defined as an amount that could differently affect the tax liabilities of two or more partners.
e.
None of these statements is correct.
Explanation / Answer
The following statement is correct definition of a concept related to partnership taxation:
c. The entity concept treats partners and partnerships as separate units and gives the partnership its own tax “personality.”
Explanation:
For tax purposes the partnership and the partners are treated as seperate units. The partnerships are required to file information tax return seperately. Also, in certain transactions between a partner and the partnership, the partner is treated as seperate and distinct from the partnership.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.