Identify Which of the Following Statements Is True

question 9

Multiple Choice

Identify which of the following statements is true.

• A)Although a partner's basis in the partnership cannot go below zero, a partner's book capital account (equity)may be negative.
• B)Tom purchased for cash a 40% capital, profits, and loss interest in the TP General Partnership. His $140,000 basis in his partnership interest includes his $45,000 share of recourse debt and his $30,000 of nonrecourse debt (that is not qualified nonrecourse real estate financing). His at-risk basis cannot be more than $65,000.
• C)Terri is a limited partner in the STU Partnership, which manufactures children's toys. Because the partnership is actively involved in a trade or business, Terri's income from the partnership is classified as active income for the passive activity loss rules.
• D)All of the above are false.

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Definitions:

Sales Associate

An employee in retail or other industries who assists customers with purchases, providing product information, and ensuring customer satisfaction.

Outside Order Taker

A sales role focused on receiving and processing orders from customers, typically not responsible for proactive selling or customer acquisition.

Inventory Clerk

A professional responsible for managing and maintaining a company's inventory, including receiving, recording, and distributing materials or products.

Taking Inventory

The process of counting and recording the quantity and condition of items or assets currently held by an organization or individual.