Identify Which of the Following Statements Is True

question 15

Multiple Choice

Identify which of the following statements is true.

• A)A partner's distributive share includes the full amount of partnership ordinary income, which she must report on her tax return plus her share of separately stated taxable and tax-exempt items.
• B)Sam has a 20% interest in partnership capital and profits but a 40% interest in partnership losses. The partnership has no special allocations or precontribution gains or losses. In a year in which the partnership reports ordinary income of $100,000 and a capital loss of $30,000, Sam's distributive share is $20,000 ordinary income and $12,000 capital loss.
• C)The partner's distributive share is the partner's share of any assets distributed by the partnership.
• D)All of the above are false.

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Definitions:

Common Law

A legal system based on custom, court rulings, and precedent rather than statutory laws.

French System

Describes the legal system primarily used in France and countries formerly part of the French colonial empire, characterized by civil law principles.

Common Law Courts

Courts that decide cases based on common law, which consists of judicial precedents and statutes as opposed to statutory or regulatory laws.

Chancery Court

A specialized court dealing with matters of equity, such as trusts, estates, and guardianships, often distinct from courts of law.