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:

Sensation

The process by which sensory receptors and the nervous system receive and represent stimulus energies from the environment.

Stimulus

Anything in the environment that elicits a response from an organism, crucial in behaviorist theories of learning and conditioning.

Axons

Long, slender projections of nerve cells, or neurons, which conduct electrical impulses away from the neuron's cell body.

Dendrites

Branch-like extensions from the neuron's cell body, which receive electrical messages from other nerve cells.