9

• What is the difference between recognition and realization in the recording of a deferred tax asset on a balance sheet?
• Briefly describe the four sources of taxable income a company evaluates in determining if a valuation allowance is necessary?

10. How do hot assets affect the character of the gain or loss on the sale of a partnership interest?

• How does a partner determine his basis in distributed assets when the partnership distributes other property in addition to money and hot assets?
• Describe the circumstances in which an S election may be involuntarily terminated.
• Compare and contrast the methods of allocating income or loss to owners for partnerships and for S Corporations.