Which of the Following Is True Concerning a Partner's Basis

question 61

Multiple Choice

Which of the following is true concerning a partner's basis in assets (other than money) distributed in an operating distribution?

• A)A partner's bases in the distributed assets will be greater than the partnership's bases in the assets.
• B)A partner's bases in the distributed assets will be equal to the partnership's bases in the assets.
• C)A partner's bases in the distributed assets will be less than or equal to the partnership's bases in the assets.
• D)None of the statements are true.

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Definitions:

Common Stock

Shares of ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Cumulative Preferred

Cumulative preferred stock is a type of preferred stock that has a provision entitling shareholders to accumulate unpaid dividends to be paid out before any dividends can be issued to other stock classes.

Par Common Stock

The face value of common stock as designated in the company's charter, not necessarily its market value.

Dividends

Dividends are a portion of a company's earnings that are distributed to shareholders as a reward for their investment.