Which of the Following Statements About the Transfer of a Partnership

question 91

Multiple Choice

Which of the following statements about the transfer of a partnership interest is not true?

• A)The seller's adjusted basis for the partnership interest is increased by the seller's share of undistributed partnership income (or reduced by partnership loss) for the portion of the partnership's taxable year ending on the date of the sale.
• B)The partnership taxable year generally does not close with respect to a partner who transfers a partnership interest at death; all amounts are allocated to the successor.
• C)The amount realized on the sale of a partnership interest is the sum of any money and the fair market value of any property received for the interest, plus the selling partner's share of partnership liabilities under § 752.
• D)With respect to a transfer of a partnership interest by gift, all partnership gain, loss, credit, etc., items are allocated between the donor and the donee.
• E)All of the above are true statements.

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Definitions:

Dividends

Payments made by a corporation to its shareholders, usually in the form of cash or additional shares, from its profits.

Depreciation

This is the systematic allocation of the cost of a tangible asset over its useful life. It reflects the consumption of the asset over time.

Tax Bill

A tax bill is an official statement from a governmental authority specifying the amount of taxes owed by an individual or organization for a certain period.

Net Cash Flow

The amount of cash that is generated or lost by a business in a given period, after accounting for all cash inflows and outflows related to operational, investing, and financing activities.