Transcribed Image Text
In: AccountingPart 1:List at least 3 common separately stated items. Explain why theymust be separately...Part 1:List at least 3 common separately stated items. Explain why theymust be separately stated to the partners.Is the character of partnership income/gains and expenses/lossesdetermined at the partnership or partner level? Why?Kaylyn, Aleeah, Bentley, and Carter LLC each own a 25 percentinterest in Bjorn Industries LLC, which generates annual grossreceipts of over $100 million. Kaylyn, Aleeah, and Bentley managethe business, but Carter LLC is a non-managing member. AlthoughBjorn Industries has historically been profitable, for the lastthree years, losses have been allocated to the members. Given thesefacts, the members want to know whether Bjorn Industries can usethe cash method of accounting. Why or why not?Part 2:Explain why a new partner who pays more for a partnershipinterest than the selling partner’s outside basis would want thepartnership to elect a special basis adjustment?Why might a partnership not want to make a §754 election toallow special basis adjustments? Explain in detail.