,1. Which section of the Internal Revenue Code deals with the
taxation of partnerships?
A. Section 721
B. Section 761
C. Section 703
D. Section 199A
Answer: B (Section 761)
Rationale: Section 761 provides the general rules for the taxation
of partnerships.
2. Under U.S. tax law, what is the maximum capital loss that an
individual taxpayer can deduct against ordinary income in a single
tax year?
A. $1,000
B. $3,000
C. $5,000
D. Unlimited
Answer: B ($3,000)
, Rationale: Individual taxpayers can deduct a maximum of
$3,000 in capital losses against ordinary income each year.
3. Which of the following forms is used to report foreign income
for U.S. taxpayers?
A. Form 1040
B. Form 8938
C. Form 8949
D. Form 1099
Answer: B (Form 8938)
Rationale: Form 8938 is used to report specified foreign
financial assets.
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