MC: Topic: Income TaxationWhich of the following is considered a “constructive receipt” of gross income? *A partner’s share in the income of the general professional partnership is credited to his capital account.Payment for the sale is deposited by buyer to the seller’s bank account.Cancellation of debt of employee by employer in consideration of friendship.A and B onlyAll of the above

Constructive receipt of gross income refers to situations where income can be used despite the…

Answered: Topic: Income Taxation Which of the…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 1BD

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MC: Topic: Income Taxation

Which of the following is considered a “constructive receipt” of gross income? *

A partner’s share in the income of the general professional partnership is credited to his capital account.
Payment for the sale is deposited by buyer to the seller’s bank account.
Cancellation of debt of employee by employer in consideration of friendship.
A and B only
All of the above

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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