Which of the Following Statements Correctly Reflects One of the Rules

question 67

Multiple Choice

Which of the following statements correctly reflects one of the rules regarding proportionate liquidating distributions?

• A) Relief of liabilities is treated as a distribution of cash but only to the extent that the cash distribution does not exceed the partner's basis in the partnership interest.
• B) A partner's basis in distributed unrealized receivables is the lesser of the partnership's basis in the receivables or their fair market value.
• C) The basis of unrealized receivables cannot be stepped up to their fair market value unless the partner has adequate unabsorbed basis.
• D) Assets are deemed distributed in the following order: cash, unrealized receivables and inventory, and finally, capital assets.
• E) The partner can recognize gain but not loss on a proportionate liquidating distribution.

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Definitions:

Complementary Medicine

A range of healthcare practices not typically part of conventional medical treatment, used alongside standard care.

Acupuncture

A form of alternative medicine and a key component of traditional Chinese medicine involving the insertion of thin needles into the body at specific points to alleviate pain and treat various health conditions.

Homeopathy

A system of alternative medicine based on the principle that like cures like, where diseases are treated with minute doses of natural substances that in larger amounts would produce symptoms of the disease.

Herbalism

The practice of using herbs and plants for medicinal or therapeutic purposes, often part of traditional or alternative medicine systems.