Identify Which of the Following Statements Is True

question 8

Multiple Choice

Identify which of the following statements is true.

• A)Distribution of partnership income in the form of cash to partners is generally tax-free to the partners and the partnership.
• B)When partners receive cash distributions from the partnership, they pay taxes on those distributions.
• C)If money distributions exceed the partner's basis in the partnership interest, the partner would have to recognize gain on the distribution from the partnership. Such gain is usually an ordinary gain.
• D)All of the above are true.

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Definitions:

Keynesian Economics

An economic theory stating that government intervention is necessary to help economies emerge from recession, through policies that stimulate demand, control inflation, and adjust interest rates.

Paradox of Voting

The concept that for a rational, self-interested voter, the costs of voting will normally exceed the expected benefits, given the low probability that one vote will influence the outcome.

Majority Voting

A voting system in which decisions are made based on the majority of votes received, often used in elections and organizational decision-making processes.

Principal-Agent Problem

A scenario in which conflicts of interest arise because the goals of a principal (e.g., a shareholder) do not align with those of an agent (e.g., a company executive).