Identify Which of the Following Statements Is True

question 57

Multiple Choice

Identify which of the following statements is true.

• A)A contribution of services for a partnership interest is a tax-free transaction.
• B)For federal income tax purposes, formation of a partnership is governed by Sec. 721.
• C)When a partnership assumes a liability on property contributed by a partner, the only effect on the contributing partner's basis in his or her partnership interest is that his or her basis will be increased by the amount of the liability assumed by the other partners.
• D)All of the above are false.

---

Definitions:

Vastus Lateralis

A muscle located on the side of the thigh, one of the components of the quadriceps femoris, involved in extending the knee.

Extensor Digitorum

A muscle in the forearm that extends the fingers and the wrist.

Pectoralis Major

A large muscle in the upper chest that aids in the movement of the shoulder and the arm.

Deltoid

A large, triangular muscle covering the shoulder joint that is responsible for lifting the arm and giving the shoulder its range of motion.