Identify Which of the Following Statements Is True

question 68

Multiple Choice

Identify which of the following statements is true.

• A)If a partner sells property received in a partnership distribution for a gain and the property was inventory in the hands of the distributing partnership, the partner will always recognize ordinary income.
• B)The primary purpose of Sec. 751 is to prevent partnerships from converting capital gains into ordinary income.
• C)Unrealized receivables include rights to payments on the sale of a capital asset.
• D)All of the above are false.

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Definitions:

Jurisdiction

The official power to make legal decisions and judgments, often within a defined area of responsibility or over certain types of legal cases.

Citizenry

The collective group of citizens or inhabitants of a particular jurisdiction, often referred to in context of their rights, duties, and participation in civic life.

Dormant Commerce Clause

A legal doctrine that prohibits states from enacting legislation that discriminates against or excessively burdens interstate commerce.

State Law

The body of law enacted by each state or territory in the United States, governing within its boundaries and apart from federal law.