Q:
Which of the following statements regarding Real Estate Limited Partnerships (RELPs) is/are correct?
I. A goal of the RELP is to establish a continuity of life for the partners
II. All of the profits from the RELP will pass through to the owners of the business
III. The RELP sends each partner a 1099-Misc to be used to compute their personal tax returns
IV. The limited partnership itself pays no taxes
a) II and IV only
b) II and III only
c) I and II only
d) I and IV only
A:
The correct answer is a):
Limited partnerships are formed to engage in a business venture for a predetermined period of time, one the business goals have been achieved the RELP is dissolved. The main tax advantage of the RELP is that the IRS treats it as a “flow-through” entity, meaning that all of the profits/losses of the RELP are passed to the owners. The RELP itself is not taxed, each partner receives a Schedule K-1 which is used to compute their individual tax return.

MORE FAQS

  1. Which of the following are not types of open-end management investment companies ...

  2. Under the Uniform Securities Act, which of the following are defined as securities ...

  3. A margin account has a long market value of $12,000, a debit balance of -$6,000 ...

  4. Which of the following signatures are required on a client’s new account form ...

  5. Which of the following statements is(are) true with respect to the factors that a manager must take ...

  6. Which of the following statements is (are) true with respect to setting the proper constraints in managing ...

  7. Which statement(s) is/are FALSE about market risk?

  8. Which of the following statements is (are) true with respect to the factors that a manager must take ...

  9. Under the Telephone Consumer Act of 1991, a telemarketer must provide which of the following to a called ...

  10. Which TWO statements are TRUE about writing covered calls? I ...

  11. Which of the following are tools that are employed by the Federal Reserve in its efforts to control the money supply?

  12. Human capital vs. physical capital: What is the difference?

  13. Can moving to a higher tax bracket cause me to have a lower net income?

  14. How did the financial crisis affect the banking sector?

  15. Do beneficiaries pay taxes on life insurance?

  16. How do I become a Chartered Financial Analyst (CFA)?

  17. What types of positions might a Chartered Financial Analyst (CFA) hold?

  18. Can you invest in hedge funds?

  19. What do economists believe causes economic growth?

  20. Why is Jersey considered a tax haven? (C, CS)

RELATED FAQS

  1. Which of the following are not types of open-end management investment companies ...

    The correct answer is d) Hedge funds are extremely aggressive entities that engage in margin and short-selling.  They are ...
  2. Under the Uniform Securities Act, which of the following are defined as securities ...

    The correct answer is a. Fixed annuities are not considered securities, since the purchaser bears no investment risk. However, ...
  3. A margin account has a long market value of $12,000, a debit balance of -$6,000 ...

    The correct answer is a. I is correct since the stock's currently valued at $12,000 are increasing 20% or $2,400. II is incorrect ...
  4. Which of the following signatures are required on a client’s new account form ... ...

    The correct answer is B. While local practices of a broker-dealer might require the client to sign the form, even when opening ...
  5. Which of the following statements is(are) true with respect to the factors that ...

    The correct answer is: c) (I) is incorrect because while he amount of new underwriting business that may be undertaken is ...
  6. Which of the following statements is (are) true with respect to setting the proper ...

    The correct answer is: d) Choice II is incorrect because the longer the investment horizon, the less emphasis must be placed ...
RELATED TERMS
  1. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
  2. IRS Publication 541

    A document published by the Internal Revenue Service (IRS) that ...
  3. Publicly Traded Partnership - PTP

    A business organization owned by two or more co-owners, that ...
  4. Form 1065

    A tax document used to report the profits, losses and deductions ...
  5. Limited Partner

    A partner in a partnership whose liability is limited to the ...
  6. Subscription Agreement

    An application by an investor to join a limited partnership. ...
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center