When Does a Partner Recognize Gain on a Distribution

question 72

Multiple Choice

When does a partner recognize gain on a distribution?

• A)In a liquidating distribution when the fair market value of the property received exceeds partnership interest basis.
• B)In a nonliquidating distribution and the property received exceeds the fair market value of the partnership interest.
• C)In a nonliquidating distribution and the cash received exceeds the basis of the partnership interest.
• D)Gain is not recognized until the property received for the partnership interest is sold.

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Definitions:

Schemas

Cognitive structures that help individuals organize and interpret information in the world around them, based on past experiences and knowledge.

Fuzzy Representations

Concepts or mental images that are not sharply defined, leading to ambiguity or vagueness in understanding.

Bookkeeping

Gradual schema change through the accumulation of bits of schema-inconsistent information.

Subtyping

Schema change as a consequence of schema-inconsistent information, causing the formation of subcategories.