Test - Senior Tax Analyst Certification Test
1. Milton owns a 40% interest in Bradley Games, a partnership. His basis in the
partnership on January 1, 2021, was $20,000. Milton took a cash distribution of
$19,000 on July 1, 2021. This $19,000 is:
a. A liquidating distribution.
b. A current distribution.
c. A reduction in Milton's share of liabilities.
d. Milton's distributive share of income.
2. Permanent adjustments on Schedule M-1 (Form 1065) include:
a. Premiums paid for life insurance policies on key employees, lobbying expenses,
and tax exempt interest.
b. Startup costs, depletion, and inventory costs.
c. Section 179 expensing, uniform capitalization adjustments, and expenses related to
tax exempt income.
d. Depreciation, amortization, and depletion.
3. Remington is a general partner who owns 50% interest in Steele Enterprises.
Rutger is a limited partner who owns 50%. The partnership has $80,000 in recourse
liabilities and $45,000 in nonrecourse liabilities. What is Remington's total share of
liabilities?
a. $62,500
b. $80,000
c. $102,500
d. $125,000
4. Natalia and Eric each own 40% of partnership NEW. On August 15, 2021, Natalia
sold her interest to Walter, a 20% partner. On August 29, 2021, Eric sold his
interest to Wendy. When does the partnership terminate?
a. August 15, 2021
b. August 29, 2021
c. December 31, 2021
1. Milton owns a 40% interest in Bradley Games, a partnership. His basis in the
partnership on January 1, 2021, was $20,000. Milton took a cash distribution of
$19,000 on July 1, 2021. This $19,000 is:
a. A liquidating distribution.
b. A current distribution.
c. A reduction in Milton's share of liabilities.
d. Milton's distributive share of income.
2. Permanent adjustments on Schedule M-1 (Form 1065) include:
a. Premiums paid for life insurance policies on key employees, lobbying expenses,
and tax exempt interest.
b. Startup costs, depletion, and inventory costs.
c. Section 179 expensing, uniform capitalization adjustments, and expenses related to
tax exempt income.
d. Depreciation, amortization, and depletion.
3. Remington is a general partner who owns 50% interest in Steele Enterprises.
Rutger is a limited partner who owns 50%. The partnership has $80,000 in recourse
liabilities and $45,000 in nonrecourse liabilities. What is Remington's total share of
liabilities?
a. $62,500
b. $80,000
c. $102,500
d. $125,000
4. Natalia and Eric each own 40% of partnership NEW. On August 15, 2021, Natalia
sold her interest to Walter, a 20% partner. On August 29, 2021, Eric sold his
interest to Wendy. When does the partnership terminate?
a. August 15, 2021
b. August 29, 2021
c. December 31, 2021
