Identify Which of the Following Statements Is True

question 31

Multiple Choice

Identify which of the following statements is true.

• A)Bob gives his 16-year-old daughter Michelle a 20% capital and profits interest in his accounting practice. She does no work for the partnership and is not involved at all with the operations of the partnership. In fact, she does not know that her dad transferred the interest in the partnership to her. If the partnership allocates an $8,000 distributive share of ordinary income to her, it is properly reported on Michelle's individual tax return.
• B)Valid family partnership partners may be subject to the "kiddie tax."
• C)Joan gives her daughter, Sarah, a 25% interest in a partnership that operates a steel mill. Sarah, age 19, was allocated $20,000 from the partnership as her share of the partnership ordinary income. The IRS will require the income to be included on Sarah's return.
• D)All of the above are false.

---

Definitions:

Biceps Femoris

A muscle of the posterior thigh that is part of the hamstrings, involved in knee flexion and thigh extension.

Semitendinosus

A muscle in the thigh that is part of the hamstring group, responsible for bending the knee and extending the hip.

Intercostal

Between the ribs.

Pectoralis Major

A large muscle in the upper chest that helps in the movement of the shoulder and the arm.