The December 31,2008,balance Sheet of the RST General Partnership Reads

question 37

Multiple Choice

The December 31,2008,balance sheet of the RST General Partnership reads as follows.

The partners share equally in partnership capital,income,gain,loss,deduction and credit.Ted's adjusted basis for his partnership interest is $40,000.On December 31,2008,he retires from the partnership,receiving a $60,000 cash payment in liquidation of his interest.The partnership agreement states that $2,500 of the payment is for goodwill.Which of the following statements about this distribution is false?

• A)If capital is NOT a material income-producing factor to the partnership, the § 736(a) payment will be $2,500.
• B)If capital IS a material income-producing factor, the entire $60,000 payment will be a § 736(b) property payment.
• C)The payment for Ted's share of goodwill will create $2,500 of ordinary income to him.
• D)The partnership can deduct any amount which is a § 736(a) payment since it will be determined without regard to partnership profits.
• E)All statements are false.

Recognize the capability of email to serve as a comprehensive reference for past communications.

Appreciate the convenience of asynchronous communication offered by email.

Identify the potential for misinterpretation in email communications and the importance of clear writing.

Acknowledge the traceability and accountability that email communication provides.

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Definitions:

Bronfenbrenner

Bronfenbrenner is a developmental psychologist who formulated the Ecological Systems Theory, which describes how different layers of the environment influence an individual's development.

Bioecological Model

A theoretical model that emphasizes the importance of biological systems and the ecological environment in the development of individuals, proposed by Urie Bronfenbrenner.

Microsystems

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Maslow's Hierarchy

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