On Packer’s tax return for the year, what amount must Packer include as ordinary income from the receipt of the partnership interest?
a. $0
b. $7,500
c. $8,500
d. $8,750
5. On a partnership tax return, all of the following are subject to special limitations and must be separately passed through to the partners, except:
a. Charitable contributions
b. Salaries to non-partners
c. Long-term capital gains
d. Dividend income
6. Prairee partnership has four equal partners, Dodd, Crank, Pick, and Mack. Each of the partners had a tax basis of $320,000 as of January 1. Prairee’s net business income for the year totaled $152,000. During the year, Prairee paid Mack guaranteed payments of $4,000 for deductible services rendered, which were not included in determining Prairee’s net business income. In addition, each of the four partners took a cash distribution of $50,000. What amount from Prairee should be included as income on Dodd’s tax return for the year?
a. $152,000
b. $42,000
c. $38,000
d. $37,000
7. Prairee partnership has four equal partners, Dodd, Crank, Pick, and Mack. Each of the partners had a tax basis of $320,000 as of January 1. Prairee’s net business income for the year totaled $152,000. During the year, Prairee paid Mack guaranteed payments of $4,000 for deductible services rendered. In addition, each of the four partners took a cash distribution of $50,000. What is Mack’s tax basis in Prairee on December 31?
a. $307,000
b. $358,000
c. $422,000
d. $472,000
8. Osha, a cash basis calendar year partnership, began business on April 1. Osha incurred and paid the following during the tax year.
Legal work associated with formation of the partnership ………… $15,260
Accounting work associated with raising additional capital ……… 10,000
What is the maximum amount of deductible organizational costs on Osha’s partnership return for the year?
a. $5,000
b. $5,513
c. $5,684
d. $6,013
9. Catherine holds a $100,000 basis in her partnership interest. On April 28 of the current tax year, the partnership distributes to her cash of $32,000, cash basis receivables with an inside basis of $0 and a fair market value of $12,000, and a parcel of land with a fair market value of $75,000 and a basis to the partnership of $65,000. After accounting for this distribution, what is Catherine’s basis in the land?
a. $65,000
b. $53,000
c. $63,000
d. $56,000

Bindloss Ltd
Summarized Liabilities and Shareholders’ Equity
As of December 31, 2017
Bank loans…………… $ 100,000
Accounts payable and accrued liabilities… 275,000
Current portion of long-term debt…… 75,000
Total current liabilities……… 450,000
Long-term debt………… 250,000
……………….. 700,000
Common share capital………. 250,000
Retained earnings………… 750,000
…………………1,000,000
Total liabilities and shareholders’ equity… $1,700,000
Bindloss Ltd
Summarized Income Statement
For the year ended December 31, 2017
Revenue………… $2,150,000
Expenses………… 1,700,000
Interest expense……… 30,000
Net income………… $ 420,000