Under Which of the Following Circumstances Will a Partner Recognize

question 42

Multiple Choice

Under which of the following circumstances will a partner recognize a loss from an operating distribution?

• A)A partner will never recognize a loss from an operating distribution.
• B)A partner will recognize a loss from an operating distribution when the partnership distributes property other than money with an inside basis greater than the partner's basis in the partnership interest.
• C)A partner will recognize a loss from an operating distribution when the partnership distributes money in an amount that is less than the partner's basis in the partnership interest.
• D)A partner will recognize a loss from an operating distribution when the partnership distributes money in an amount that is greater than the partner's basis in the partnership interest.

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Definitions:

Great Depression

A severe worldwide economic downturn that took place during the 1930s, leading to high unemployment and financial distress.

Reconstruction Finance Corporation

A government corporation in the United States that provided financial support to banks, railroads, and other businesses to stimulate the economy during the Great Depression.

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

Public-Works Projects

Government-funded projects designed to create infrastructure benefiting the public, such as roads, bridges, and schools.