Identify Which of the Following Statements Is True

question 42

Multiple Choice

Identify which of the following statements is true.

• A) Terri is a limited partner in the STU Partnership, which manufactures children's toys. Because the partnership is actively involved in a trade or business, Terri's income from the partnership is classified as active income for the passive activity loss rules.
• B) Tom purchased for cash a 40% capital, profits, and loss interest in the TP General Partnership. His $140,000 basis in his partnership interest includes his $45,000 share of recourse debt and his $30,000 of nonrecourse debt (that is not qualified nonrecourse real estate financing). His at- risk basis cannot be more than $65,000.
• C) Although a partner's basis in the partnership cannot go below zero, a partner's book capital account (equity) may be negative.
• D) All of the above are false.

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Definitions:

Federal Budget Deficit

The shortfall when the federal government's expenditures exceed its revenues within a fiscal year.

Federal Budget Deficit

The financial situation where the federal government's expenditures exceed its revenues in a given fiscal year.

National Debt

The total amount of money that a country's government has borrowed by various means.

Fiscal Policy

Government policies concerning taxation and spending that are aimed at influencing economic conditions, including promoting economic growth, controlling inflation, and reducing unemployment.