When a Partner's Share of Debt Is Decreased, the Reduction

question 48

True/False

When a partner's share of debt is decreased, the reduction is treated as a cash distribution from the partnership to the partner.

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Definitions:

Secretary of the State

A high-ranking official typically responsible for keeping public records, administering elections, and managing the affairs of the state government.

S Corporation

A special form of corporation in the United States that allows for the income, losses, deductions, and credits to be passed directly to shareholders to avoid double taxation.

LLC

A Limited Liability Company, a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Double Taxed

The imposition of two or more taxes on the same income, asset, or financial transaction.