Identify Which of the Following Statements Is True

question 77

Multiple Choice

Identify which of the following statements is true.

• A)When unrealized receivables are distributed in a liquidating distribution, the basis of the receivables will be increased.
• B)The bases of unrealized receivables and inventory distributed by a partnership in liquidation of a partnership interest are never increased above their bases in the hands of the partnership.
• C)The basis of the partnership interest is apportioned between all of the assets received in a liquidating distribution based on the relative FMVs of the assets.
• D)All of the above are false.

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Definitions:

Specialized Resources

Resources uniquely suited for a specific type of production or service, enhancing efficiency.

Avoids Taxes

Strategies or actions taken by individuals or companies to minimize their tax liability legally or illegally.

Public Good

A good that, once produced, is available for all to consume, regardless of who pays and who doesn’t; such a good is nonrival and nonexclusive, such as a safer community.

Regardless Of Payment

A phrase indicating that an action or decision is to be made without considering the payment or compensation involved.