Identify Which of the Following Statements Is True

question 74

Multiple Choice

Identify which of the following statements is true.

• A)The contribution of Sec. 1245 property to a partnership triggers recognition of ordinary income by the contributor at the time of the transfer.
• B)A partner may not recognize ordinary income when receiving a capital and profits interest in a partnership in exchange for services.
• C)When a partnership interest is given to a partner in exchange for services, the partnership can deduct or capitalize the FMV of the services, depending on the nature of the services.
• D)All of the above are false.

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Definitions:

Formal Operational Thought

A stage in Piaget's theory of cognitive development, where individuals develop the ability to think abstractly, systematically, and logically.

Concrete Operational Thought

A phase in Piaget's cognitive development theory where kids develop the capacity to logically reason about tangible events.

Moral Realistic Thought

A stage of moral development where individuals believe that rules are absolute and that morality is determined by the consequences of actions.

Transductive Thought

A type of reasoning commonly seen in children where conclusions are made based on specific examples, rather than general logic.