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.

Recognize the appropriate methods for reporting foreign exchange gains on consolidation.

Comprehend the causes of accounting exposure to changes in foreign exchange rates.

Grasp the impact of currency realignment on the earnings ability of a foreign operation.

Determine the primary factors for choosing a functional currency.

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Definitions:

Niacin

A vitamin (B3) necessary for healthy skin, nerves, and digestion; also helps convert food to energy.

Thiamine

A water-soluble B-vitamin (Vitamin B1) essential for glucose metabolism and the functioning of the nervous system.

Riboflavin

A B-vitamin (B2) that is essential for body growth, red blood cell production, and energy release from carbohydrates.

Pyridoxine

Another name for Vitamin B6, a water-soluble vitamin important for normal brain development and for keeping the nervous and immune systems healthy.