Which of the Following Distributions Would Never Result in Gain

question 110

Multiple Choice

Which of the following distributions would never result in gain recognition to the recipient (distributee) partner?

• A) A distribution of cash that follows a contribution of appreciated property to the partnership.
• B) A distribution of a slightly appreciated marketable security.
• C) A distribution of property to a partner who, three years ago, contributed other property with a built-in gain.
• D) A distribution to a second partner of property contributed by the first partner two years ago.
• E) A distribution of inventory property that is proportionate to the partners.

---

Definitions:

Commercial Draft

An instrument used in international trade where the seller instructs the buyer to pay a specified amount of money at a specified time.

Carrying Cost

The total cost of holding inventory, including storage, maintenance, and insurance.

Managing Credit

The process of monitoring and controlling a person's or business's credit usage and payments to ensure financial stability and minimize risk of default.

Required Return

The minimum return an investor expects to achieve by investing in a particular asset, considering its risk level.