A Partnership Will Take a Carryover Basis in an Asset

question 102

Multiple Choice

A partnership will take a carryover basis in an asset it acquires when:

• A) The partnership acquires the asset through a § 1031 like-kind exchange.
• B) A partner owning 25% of partnership capital and profits sells the asset to the partnership.
• C) The partnership leases the asset from a partner on a one-year lease.
• D) The partnership acquires the asset from a partner as a contribution to partnership capital under § 721(a).
• E) None of these; the partnership always takes a substituted basis in the assets it receives.

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Definitions:

Hydrophobic

Describing molecules or parts of molecules that repel water, often nonpolar substances that do not mix well with water.

Hydrophilic

Describes molecules or substances that are attracted to water and can be dissolved in it, typically because of the presence of polar groups.

Phospholipids

A class of lipids that are a major component of all cell membranes, consisting of two fatty acids, a glycerol unit, and a phosphate group, playing key roles in cellular structures and functions.

Choline

An essential nutrient that is part of the B-complex vitamin family; it's crucial for liver function, brain development, muscle movement, and metabolism.