Identify Which of the Following Statements Is True

question 17

Multiple Choice

Identify which of the following statements is true.

• A) The partner's basis in the partnership interest is normally reduced by the FMV of property distributed in a nonliquidating distribution.
• B) 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.
• C) 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.
• D) All of the above are false.

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Definitions:

Buyers

Individuals or entities that purchase goods or services for personal use or for resale.

Sellers

Individuals or businesses that provide goods or services to consumers in exchange for payment.

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund public expenditures.

Corporations' Profits

The financial earnings that remain for a corporation after all expenses, taxes, and costs have been deducted from total revenue.