Gus Is the General Partner and Laura Is the Limited

question 24

Multiple Choice

Gus is the general partner and Laura is the limited partner of GL Limited Partnership. Gus contributes $500,000 cash and Laura contributes a building with a fair market value of $600,000 (adjusted basis of $125,000) to the partnership.Gus and Laura share equally in partnership profits and losses.In 2008,the first year in business,GL obtains nonrecourse financing of $200,000 to cover operating expenses and incurs a $1,200,000 loss.How much loss may be passed through to Gus and Laura?

• A)$600,000 to Gus, $225,000 to Laura.
• B)$500,000 to Gus, $600,000 to Laura.
• C)$500,000 to Gus, $125,000 to Laura.
• D)$700,000 to Gus, $125,000 to Laura.
• E)None of the above.

---

Definitions:

Ethical Decisions

These are choices made based on moral principles and values, considering what is right and wrong in order to benefit society and minimize harm to individuals.

Sarbanes-Oxley Act

A U.S. federal law enacted in 2002 that set new or enhanced standards for all U.S. public company boards, management, and public accounting firms.

CEOs And CFOs

Chief Executive Officers and Chief Financial Officers, respectively, senior executives responsible for managing the overall operations and financial actions of a company.

Primary Stakeholder

Individuals or groups most directly affected by a corporation's activities, policies, and practices, often including employees, customers, and investors.