Identify Which of the Following Statements Is True

question 31

Multiple Choice

Identify which of the following statements is true.

• A)Bob gives his 16-year-old daughter Michelle a 20% capital and profits interest in his accounting practice. She does no work for the partnership and is not involved at all with the operations of the partnership. In fact, she does not know that her dad transferred the interest in the partnership to her. If the partnership allocates an $8,000 distributive share of ordinary income to her, it is properly reported on Michelle's individual tax return.
• B)Valid family partnership partners may be subject to the "kiddie tax."
• C)Joan gives her daughter, Sarah, a 25% interest in a partnership that operates a steel mill. Sarah, age 19, was allocated $20,000 from the partnership as her share of the partnership ordinary income. The IRS will require the income to be included on Sarah's return.
• D)All of the above are false.

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Council of Economic Advisers

A group of economists appointed by the President of the United States to provide objective economic analysis and advice on the development and implementation of a wide range of domestic and international economic policy issues.

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The Executive Office of the President is comprised of the immediate staff of the President, as well as multiple levels of support staff who report directly to the President and are responsible for a wide range of tasks and coordination of national policies.

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A duty or responsibility that is outlined or mandated by a constitution.

Vice President

The second-highest executive officer in a governmental administration, who acts as deputy to the president, with duties and responsibilities that can vary widely depending on the administration.