Which of the Following Statements Concerning § 751(b) Disproportionate Distributions

question 29

Multiple Choice

Which of the following statements concerning § 751(b) disproportionate distributions is accurate?

• A)Both the distributing partnership and the recipient partner may recognize taxable gain because of a disproportionate distribution.
• B)A disproportionate distribution can trigger the recognition of either ordinary gain or loss to the recipient partner.
• C)A disproportionate distribution can only occur if the partnership has failed to make a valid § 754 election.
• D)The disproportionate distribution rules of § 751(b) reflect the entity theory of partnerships.
• E)None of the above is accurate.

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Definitions:

Socialist Revolutionaries

A political movement advocating for the redistribution of wealth and the restructuring of society along socialist lines, often through revolutionary means.

Revolutionary Class

Social groups that play a key role in instigating, leading, or implementing significant changes or revolutions in society.

Peasantry

Refers to members of the lower rural classes in society, traditionally engaged in agriculture or related activities.

Treaty of Brest-Litovsk

A peace treaty signed in 1918 between the Bolshevik government of Russia and the Central Powers, marking Russia’s exit from World War I, and resulting in significant territorial losses for Russia.