11. Structural components that would be considered part of a building include all of the following, EXCEPT for: a. Ornamental statue in the lobby that is routinely moved b. Stairs c. Windows d. doors e. ceilings 12. Real Co, Inc. has average annual gross receipts of $20,000,000 during 2021-2023. In 2024, Real Co constructs an office building and incurs $10,000,000 in direct employee costs, consisting of $2,000,000 in materials and $8,000,000 in wages, in constructing the building. Real Co also incurs $2,400,000 in indirect constructions costs for utilities at the construction site. How much of the costs must ABC capitalize? a. $12,400,000 b. $10,000,000 c. $10,400,000 d. $2,000,000 e. None of the costs must be capitalized. 13. Unique aspects of operating a business in the form of a limited partnership include all of the following EXCEPT: a. A certificate of limited partnership must be filed with the state. b. The general partner remains liable for the obligations of the partnership. c. The general partner manages the partnership. d. Limited partners will never be liable for obligations of the partnership. e. Liability of limited partners is generally limited to capital contributions. 14. Allen and Debbie are equal partners (50/50) in a partnership. Debbie contributes $2,500,000 in cash while Allen contributes an asset worth $2,500,000 with an adjusted basis of $500,000. The partnership’s basis in the asset is $500,000 (carryover basis). If the partnership later sells the asset for $3,750,000, how much gain must Allen and Debbie report? a. Allen and Debbie must each report $1,625,000 in gain. b. Allen and Debbie must each report $625,000 in gain. c. Allen must report $2,000,000 in gain and Debbie must report $1,250,000 in gain. d. Allen must report $2,625,000 in gain and Debbie must report $625,000 in gain. e. Allen must report $3,250,000 in gain 15. A new partner contributes property worth $2,000,000 and an adjusted basis to the new partner of $500,000 to a partnership in return for a 20% interest in the partnership. The property was subject to an outstanding mortgage of $400,000. What is the new partner’s basis in the partnership? a. $180,000 b. $500,000 c. $2,000,000 d. $1,600,000 e. $100,000