Identify Which of the Following Statements Is True

question 33

Multiple Choice

Identify which of the following statements is true.

• A)If a partnership asset with a deferred precontribution gain is distributed in a nonliquidating distribution to the partner who contributed the asset, the precontribution gain must be recognized by the partner.
• B)The partner's basis in the partnership interest is normally reduced by the FMV of property distributed in a nonliquidating distribution.
• C)When a current distribution from a partnership reduces the basis of the partnership interest to zero, the partner's interest in the partnership is terminated.
• D)All of the above are false.