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If partnerships retain their after-tax earnings, when will partners be taxed on the earnings? A)Partners will...

If partnerships retain their after-tax earnings, when will partners be taxed on the earnings?

  • A)Partners will be taxed when they sell their shares at a gain.

  • B)Partners will be taxed when they elect to be taxed on undistributed retained earnings.

  • C)Partners will be taxed when the earnings are distributed to the partners.

  • D)Partners will be taxed as partnership earnings are allocated to them at the end of the year whether they actually receive a distribution or not.

Qualified business income does not include which of the following?

  • A)Income earned in the United States.

  • B)Income generated from specified services.

  • C)Dividend income.

  • D)Income generated from specified services and Dividend income.

Which of the following statements is true about compensation paid to owners who work for an entity taxed as a partnership?

Multiple Choice

  • A)The entity is not allowed to deduct the compensation in computing its business income.

  • B)The compensation is employee compensation.

  • C)The entity must withhold self-employment tax on the compensation.

  • D)The compensation is self-employment income to the owner-worker.

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