Identify Which of the Following Statements Is True

question 101

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) 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.
• C) A partner may not recognize ordinary income when receiving a capital and profits interest in a partnership in exchange for services.
• D) All of the above are false.

---

Definitions:

International Business

A business that conducts for-profit transactions of goods and services across national boundaries.

For-Profit Transactions

Financial activities conducted by businesses with the primary objective of earning profit, as opposed to non-profit or charitable activities.

World 3.0

A world where nations balance cooperation in the global economy with national identities and interests.

Global Integration

The process of interconnecting different nations and regions of the world through economic, financial, political, and cultural exchanges.