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:

Competence

The ability and capacity to perform a task or role effectively, typically backed by specific skills, knowledge, and qualifications.

Communication Barriers

Obstacles or challenges that hinder effective exchange of information or understanding between individuals or groups.

Perceptual

Relating to the ability to interpret or become aware of something through the senses.

Impact

The effect or influence of one factor on another, which may refer to social, economic, environmental, or personal outcomes.