Regarding a Partnership, Which of the Following Statements Is/are Always

question 33

Multiple Choice

Regarding a partnership, which of the following statements is/are always correct?
I.If a partnership is an active trade or business and it has a $65,000 loss from its business operations that is passed-through as an active loss to its partners, each active partner can deduct his full share of loss for the year to the extent they have basis that is at-risk.
II.Salaries and bonuses paid to partner-employees (other than guaranteed payments) are a deductible business expense.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Owner's Equity

The residual interest in the assets of a company after deducting liabilities.

Trial Balance

A trial balance is a bookkeeping report that lists the balances in each of an organization's general ledger accounts.

General Ledger

A complete record of all financial transactions over the life of a company, serving as the primary source for generating financial statements.

Entire Group

This term signifies the collective entirety of a set of items, individuals, or entities being considered as a whole.