Reference no: EM132597367

Question 1: Permanent adjustments on Schedule M-1 (Form 1065) include:

A. Depreciation, amortization, and depletion.

B. Government penalties paid, political expenses, and 50% of deductible meals.

C. Political expenses, depreciation, and 50% of deductible meals.

D. 50% of meals and 100% of entertainment, depletion, and government penalties paid.

Question 2: On a partner's Schedule K-1, Item L:

A. Is required when Schedule B, line 4 is checked "yes."

B. Is completed only when the partnership uses GAAP accounting.

C. Shows any increase in the partner's account.

D. Reports the partner's basis in the partnership.

Question 3: A partner's outside basis in a partnership will generally equal their:

A. Book capital account plus their share of liabilities.

B. Book capital account plus their share of recourse liabilities.

C. Tax capital account plus their share of liabilities.

D. Tax capital account plus their share of recourse liabilities.