Which of the Following Is a Correct Definition of a Concept

question 58

Multiple Choice

Which of the following is a correct definition of a concept related to partnership taxation?

• A) The aggregate concept treats partners and partnerships as separate units and gives the partnership its own tax personality.
• B) A partner's capital-sharing ratio is defined as the percentage of partnership assets (capital) that would be allocated to the partner upon liquidation of the partnership.
• C) The partnership's outside basis is defined as the sum of each partner's capital account balance.
• D) A special allocation is defined as an amount that could differently affect the tax liabilities of two or more partners.
• E) All of these.

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Definitions:

Accrued Annual Interest

Interest that has been incurred but not yet paid over a year, representing a liability for the borrower.

Sold Bonds

The action of issuing bonds to investors, raising capital by incurring long-term debt.

Long-Term Investment

A long-term investment is an account on the asset side of a company's balance sheet that represents the company's investments, including stocks, bonds, real estate, and cash, held for more than one year.

Net Income

The total profit or loss of a company after all revenues, expenses, taxes, and costs have been subtracted from total revenue.