Nicholas, a 1/3 Partner with a Basis in the Interest

question 44

True/False

Nicholas, a 1/3 partner with a basis in the interest of $80,000 at the beginning of the year, received a guaranteed payment in the current year of $50,000. Partnership income before consideration of the guaranteed payment was $20,000. Nicholas reports a $10,000 ordinary loss from partnership operations, and the $50,000 guaranteed payment as ordinary income.

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Definitions:

Projective

A type of psychological test in which subjects reveal their unconscious thoughts and feelings through the interpretation of ambiguous or unstructured stimuli.

Schizophrenic

Relating to schizophrenia, or an individual diagnosed with this mental disorder characterized by distortions in thinking, perception, emotions, language, sense of self, and behavior.

Manic-depressive

A bipolar disorder characterized by mood swings that include one or more episodes of mania and may also include episodes of depression.

Anorexia Nervosa

An eating disorder characterized by an abnormally low body weight, intense fear of gaining weight, and a distorted perception of body weight.