ExpertHard1 markMultiple Choice
CPA · Question 42 · Area V: Entity Taxation
Which of the following is a 'separately stated item' on a Partnership Schedule K-1?
Which of the following is a 'separately stated item' on a Partnership Schedule K-1?
Answer options:
A.
Charitable contributions
B.
Employee salaries (non-partners)
C.
Rent expense
D.
Depreciation expense (MACRS)
How to approach this question
Ask: Does this item affect different partners differently based on their personal tax situation? If yes, it's Separately Stated.
Full Answer
A.Charitable contributions✓ Correct
Items that could affect partners' tax liabilities differently must be separately stated. Charitable contributions are subject to AGI limitations at the individual partner level, so they are separately stated. Salaries, rent, and standard depreciation are part of ordinary business income.
Common mistakes
Thinking depreciation is always separately stated (only §179 is).
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