Identify Which of the Following Statements Is True

question 46

Multiple Choice

Identify which of the following statements is true.

• A) The basis of the partnership interest is apportioned between all of the assets received in a liquidating distribution based on the relative FMVs of the assets.
• B) When unrealized receivables are distributed in a liquidating distribution, the basis of the receivables will be increased.
• C) The bases of unrealized receivables and inventory distributed by a partnership in liquidation of a partnership interest are never increased above their bases in the hands of the partnership.
• D) All of the above are false.