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.

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Definitions:

Henry George

A 19th-century American economist and writer known for his belief that individuals should own the value they produce but that land and natural resources should belong to all (the single tax theory).

Single Tax

Concept of taxing only landowners as a remedy for poverty, promulgated by HenryGeorge in Progress and Poverty (1879).

Inequality

The state of being unequal, especially in terms of rights, status, and opportunities among different groups of people in society.

Andrew Carnegie

A Scottish-American industrialist and philanthropist who led the expansion of the American steel industry in the late 19th century and is often identified as one of the richest people in history.