Partnership nonliquidating distributions

A) A revenue ruling is issued by the Internal Revenue Service only in response to a written inquiry by a taxpayer. Answer: Page Ref.: C:1-11 through C:1-13 38) Identify which of the following statements is . Answer: Page Ref.: C:2-8 6) Section 351 applies to an exchange if the contributing shareholders own more than 50% of a corporation’s stock after the transfer.

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Answer: Page Ref.: C:1-26 10) According to the , CPAs must verify all tax return information submitted by reviewing client documentation. A) Tax planning is an integral part of both closed-fact situations and open-fact situations. Answer: Page Ref.: C:1-7 19) Which of the following steps, related to a tax bill, occurs first? A) Paragraph references are most commonly used when citing or referring to the tax statutes. C) Proposed and temporary regulations are generally issued simultaneously. 1.199-2” refers to A) the first regulation issued in 1999. C) Partners are taxed on their allocable share of income whether it is distributed or not.

Answer: Page Ref.: C:1-27 11) When a taxpayer contacts a tax advisor requesting advice as to the most advantageous way to dispose of a stock, the tax advisor is faced with A) a restricted-fact situation. B) The first step in conducting tax research is to clearly understand the issues involved. D) all of the above Answer: Page Ref.: C:1-7 15) Identify which of the following statements is . D) forwarded to the Senate Finance Committee for consideration. A) signature or veto by the President of the United States B) consideration by the Senate Finance Committee C) consideration by the entire Senate D) consideration by the House Ways and Means Committee Answer: Page Ref.: C:1-7 20) When the House and Senate versions of a tax bill are not in agreement, the disagreements are resolved by the A) Ways and Means Committee. B) Title 26 of the United States Code and the Internal Revenue Code of 1986 are synonymous. D) Proposed regulations do not provide any insight into the IRS’s interpretation of the tax law. D) subsection of the Code section being interpreted. D) Partners are considered employees of the partnership.

C) Regulations carry more weight than revenue rulings. Answer: Page Ref.: C:1-12 36) Which of the following documents is issued by the IRS to a specific taxpayer? 200611075 usually indicates the ruling was made public in the 11th week of 2006. B) Technical advice memoranda are issued by the Internal Revenue Service’s National Office to provide an answer to a technical question that arises in an audit. D) issued by the national office in response to an audit request. Answer: Page Ref.: C:2-6 4) The check-the-box regulations permit an LLC to be taxed as a C corporation.

B) Revenue rulings carry more weight than federal court decisions. C) the 541st ruling of 2006 found on page eight in Vol. D) the 1st ruling of 2006 found on page 541 in the 2006 volume of the Cumulative Bulletin. Answer: Page Ref.: C:1-13 39) A Technical Advice Memorandum is usually A) an internal IRS document describing alternative legislative proposals. C) requested by the taxpayer before entering into a taxable transaction. Answer: Page Ref.: C:2-6 3) S corporations must allocate income to shareholders based on their proportionate stock.

Answer: 116) Discuss the conflict between advocacy for a client and responsibility to the IRS.

What guidance do the Statements on Standards for Tax Services provide in this dilemma?Answer: Page Ref.: C:1-10 26) When Congress passes a statute with language such as, “The Secretary shall prescribe such regulations as he may deem necessary,” the regulations ultimately issued for that statute are A) congressional regulations. Answer: Page Ref.: C:1-10 28) Identify which of the following statements is true. B) In a general partnership, all partners have unlimited liability for partnership debts.A) If regulations are issued prior to the latest tax legislation dealing with a specific Code section, the regulations are no longer effective to the extent they conflict with the provisions in the new legislation. C) In a limited partnership, all partners participate in managerial decision making. Answer: Page Ref.: C:2-4 19) Identify which of the following statements is true. A) Revenue rulings carry more weight than regulations. 541” refers to A) the eighth ruling of 2006 found on page 541 in Vol. B) the eighth ruling of 2006 found on page 541 in the 2006 volume of the Cumulative Bulletin. D) Announcements are more technical than information releases. Answer: Page Ref.: C:2-3 2) S corporations are flow-through entities in which S income is allocated to shareholders. 301.7002-5 Answer: Page Ref.: C:1-11 34) Which of the following best describes the weight of a revenue ruling? 2006-51, 22 refers to an annotation of an Internal Revenue Service release. Answer: Prentice Hall’s Federal Taxation 2013: Corporations, (Pope/Anderson/Kramer) Chapter C2 Corporate Formations and Capital Structure 1) A sole proprietor is required to use the same reporting period for both business and individual tax information.B) Legislative regulations are more likely to be invalidated by the courts than are interpretative regulations. A) Regular corporation and C corporation are synonymous terms.

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