A Partnership Making an Operating Distribution Will Recognize Gain or Loss

question 13

True/False

A partnership making an operating distribution will recognize gain or loss only when the partner that receives the distribution recognizes gain or loss.

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Definitions:

Disaffirm

The legal right to renounce or void a contract or agreement, especially in cases involving minors or misrepresentation.

Existence

The state or fact of living, being present, or being real.

Mentally Incompetent Persons

Individuals who are legally recognized as unable to make certain types of decisions for themselves due to mental disability or illness.

Disaffirmed

The act of denying or rejecting a contract or agreement, typically by one who was not legally capable of giving consent at the time of the agreement.