A Partnership Terminates for Tax Purposes

question 21

Multiple Choice

A partnership terminates for tax purposes

• A) when at least 50% of the total interest in partnership capital and profits changes hands by sale or exchange within twelve consecutive months.
• B) only when it terminates under local partnership law.
• C) when a partnership tax return (Form 1065) ceases to be filed by the partnership.
• D) when the sale of partnership assets is made only to an outsider(s) and not to an existing partner(s).

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