On a Nonliquidating Distribution of Cash from a Partnership, the Partner

question 65

Multiple Choice

On a nonliquidating distribution of cash from a partnership, the partner will recognize gain if
I.the cash distributed exceeds his/her basis in the partnership.
II.the cash distributed exceeds his/her share of the net income of the partnership for the year.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Total Revenue Curve

A graphical representation of the total income a firm receives from the sale of its goods or services at various levels of output.

Marginal Cost

The supplemental charge that arises from the production of an extra good or service unit.

Marginal Revenue

Increase in earnings from selling an additional unit of a product or service.

TR = TC

The condition where total revenue equals total cost, indicating a break-even point in financial performance.