Which of the Following Statements Is Always Correct Regarding Assets

question 206

Multiple Choice

Which of the following statements is always correct regarding assets acquired by a newly formed partnership? If a partner contributes:

• A) Depreciable property: The partnership treats the property as newly acquired depreciable property and may claim a § 179 deduction.
• B) Unrealized (cash-basis) receivables: The partnership will report a capital gain when the receivable is collected.
• C) Inventory (in the partner's hands): The partnership reports ordinary income if the property is held as a capital asset and sold within five years of the contribution date.
• D) Land valued at less than its basis: The partnership reports a § 1231 loss if the property is sold at a loss.
• E) All of these statements are always true.

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Definitions:

Candida

Candida refers to a genus of fungi that includes several species, some of which can cause infections in humans, known as candidiasis, particularly in immunocompromised individuals.

Claviceps

A genus of fungi known for infecting grains and producing toxic alkaloids, notably causing ergotism when consumed by humans and animals.

Psilocybe

A genus of psychedelic mushrooms that contain psilocybin and psilocin, substances known for their psychoactive properties.

Penicillium

A genus of fungi used in the production of penicillin, a group of antibiotics derived from natural sources.