If a Partner Receives a Property Distribution Consisting of Partnership

question 28

True/False

If a partner receives a property distribution consisting of partnership inventory, and in a subsequent year sells the distributed property at a gain, such gain must always be recognized as ordinary income.

---

Definitions:

Non-Eligible Dividends

Dividends that do not qualify for the enhanced dividend tax credit in certain jurisdictions, often associated with smaller businesses.

Average Tax Rate

The proportion of total income that an individual or corporation pays in taxes, calculated by dividing the total tax by the taxable income.

Interest Income

The revenue earned from deposit accounts or investments through the interest payments received.