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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Definitions:

Presbyopia

A natural, age-related loss of the eyes' ability to focus on close objects, typically beginning in mid to late adulthood.

Lens Elasticity

The ability of the lens in the eye to change shape to focus on objects at various distances; it tends to decrease with age.

Cornea

The transparent front part of the eye that covers the iris, pupil, and anterior chamber, contributing to the eye's ability to focus light.

Sclera

The white outer layer of the eyeball, providing structural support and protection for the inner components of the eye.