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:

Critical Thinking Skill

The intellectual ability to analyze information, evaluate evidence, and understand arguments independently and thoughtfully.

Dominance Structuring

The organization or arrangement of elements within a system that establishes a hierarchy of control or influence.

Cognitive Risks

Refers to the potential hazards or errors in judgment that can occur due to biases, heuristics, and other limitations inherent in human cognition.

Dominance

A situation in social, ecological, or other forms of hierarchies where one entity exercises control or influence over others.