Which of the Following Statements Is True Regarding Partnership Operating

question 31

Multiple Choice

Which of the following statements is true regarding partnership operating distributions?

• A) If a partner's outside basis is less than the bases of the assets distributed in an operating distribution, the partner will recognize a loss.
• B) If a partner's outside basis is greater than the bases of the assets distributed in an operating distribution, the partner will recognize a gain.
• C) If a partner's outside basis is greater than the bases of the assets distributed in an operating distribution, the partner will recognize a loss.
• D) None of the statements are true.

---

Definitions:

Notice-and-Comment Rule Making

A procedure required by law in the United States for federal agencies to give the public notice of a proposed regulation and the opportunity to submit comments.

Interpretive Rules

Administrative rules, issued by governmental agencies, that clarify or explain existing laws and regulations without creating new obligations.

Statutes

Written laws enacted by a legislative body at the federal, state, or local level.

Executive; Independent

An independent executive refers to a high-level manager or officer in an organization who does not have direct ties or conflicts of interest with the company, ensuring unbiased decision-making.