Which One of the Following Statements Regarding Partnership Taxation Is

question 44

Multiple Choice

Which one of the following statements regarding partnership taxation is incorrect?

• A)A partnership is not a taxable entity for Federal income tax purposes and is not required to file a return.
• B)Partnership income is comprised of ordinary partnership income or loss and separately stated items.
• C)A partnership is required to file a return with the IRS.
• D)A partner's profit-sharing percent may differ from the partner's loss-sharing percent.
• E)All of these statements are correct.

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Definitions:

Marginal Cost

The expenditure involved in producing a further unit of a good or service.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be used by everyone and one person's use doesn't diminish another's.

Optimal Quantity

The amount of a good or service that yields the maximum economic benefit or utility.

Cost-Benefit Analysis

A comparison of the marginal costs of a project or program with the marginal benefits to decide whether or not to employ resources in that project or program and to what extent.