Which of the following is NOT a separately stated itemWhich of the following is NOT a separately stated item? Multiple choice question. Capital gains and losses Sales revenue less costs of goods sold Section 1231 gains and losses Tax-exempt income Dividend incomeAnswer & ExplanationThe correc...
Which of the following is NOT a separately stated item? Multiple choice
question. Capital gains and losses Sales revenue less costs of goods sold Section
1231 gains and losses Tax-exempt income Dividend income
Answer & Explanation
The correct answer is "Sales revenue less costs of goods sold".
Explanation:
Separately stated items are those that are reported separately on a partner's
Schedule K-1 in a partnership or shareholder's Schedule K-1 in an S
corporation. These items retain their tax characteristics and are taxed
accordingly on the partner's or shareholder's personal tax return.
The following are separately stated items:
1. Capital gains and losses: These are reported separately because they may
be subject to a different tax rate than ordinary income.
2. Section 1231 gains and losses: These are reported separately because they
are taxed at a different rate than ordinary income. Section 1231 gains and
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