Under the Revised Uniform Partnership Act (RUPA), absent an agreement to the contrary, how are profits and losses shared among partners?

Answer options:

Profits are shared equally; losses are shared in the same manner as profits.

Profits are shared in proportion to capital contributions; losses are shared equally.

Profits and losses are shared in proportion to capital contributions.

Profits are shared equally; losses are shared in proportion to capital contributions.

How to approach this question

Partnership Default = Equality (Heads). LLC/Corp Default = Capital (Dollars).

Full Answer

A.Profits are shared equally; losses are shared in the same manner as profits.✓ Correct

Under RUPA, unless the partnership agreement states otherwise, partners share profits equally, and losses are shared in the same proportion as profits (equally).

Common mistakes

Assuming capital contribution ratios apply (that's the rule for Corporations and often LLCs, but not General Partnerships).

Question 38 All questions Question 40

Practice the full CPA REG Practice Exam 4

72 questions · hints · full answers · grading

More questions from this exam

Q01A CPA is representing a client in an IRS examination. The client has requested that the CPA not p...Hard Q02A tax return preparer is engaged to prepare a tax return for a client who has a significant deduc...Hard Q03Regarding the burden of proof in a civil tax proceeding, which of the following statements is cor...Hard Q04A taxpayer filed their Year 1 individual income tax return on April 1, Year 2. The return reporte...Hard Q05Under the Ultramares doctrine regarding a CPA's liability for negligence to third parties, which ...Hard

View all 72 questions →