The STU Partnership, an Electing Large Partnership, Has No Passive

question 71

Multiple Choice

The STU Partnership, an electing Large Partnership, has no passive activities and reports the following transactions for the year: net long- term capital losses $50,000, Sec. 1231 gain $60,000, ordinary income $20,000, charitable contributions $15,000, and tax- exempt income $2,000. How much will be reported as long- term capital gains to its partners?

• A) $0
• B) $50,000
• C) $60,000
• D) $10,000

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Definitions:

Merchandising Business

A type of business that purchases goods wholesale and resells them retail; primarily involved in selling merchandise to consumers.

Revenue Account

A revenue account is an account that records the income earned from the sale of goods or the provision of services before any expenses are deducted.

Sales to Total Assets Ratio

A financial ratio that measures a company's ability to use its assets to generate sales, calculated by dividing sales by total assets.

Cost of Merchandise Sold

The total cost incurred to purchase or produce the goods sold by a company during a specified period, directly affecting the gross profit.