When Does a Partner Recognize Gain on a Distribution

question 72

Multiple Choice

When does a partner recognize gain on a distribution?

• A)In a liquidating distribution when the fair market value of the property received exceeds partnership interest basis.
• B)In a nonliquidating distribution and the property received exceeds the fair market value of the partnership interest.
• C)In a nonliquidating distribution and the cash received exceeds the basis of the partnership interest.
• D)Gain is not recognized until the property received for the partnership interest is sold.

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Definitions:

Bad News

Information that is unwelcome, disappointing, or upsetting to the recipient.

Apology

An expression of regret or remorse for actions or words that may have caused harm or inconvenience to someone else.

Indirect Approach

The indirect approach involves presenting background and supportive information before revealing the main message or conclusion, often used in sensitive or controversial contexts.

Buffer

A temporary storage area used to manage data transfer between devices or processes that operate at different speeds or with different priorities.