Identify Which of the Following Statements Is True

question 21

Multiple Choice

Identify which of the following statements is true.

• A)The Hunter Partnership has a net long-term capital gain of $4,000 and a net short-term capital loss of $1,000 for the current tax year. The gain and loss will be netted and the partners will include their proportionate share of the $3,000 net long-term capital gain on their return.
• B)The Right Partnership sells a delivery truck and recognizes a gain of $2,000, which represents depreciation recaptured under Sec. 1245. The $2,000 gain will retain its identity as a separately stated item.
• C)For tax purposes, the partnership takes a carryover basis in the contributed property that references the contributing partner's basis.
• D)All of the above are false.

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Definitions:

Defining Characteristic

A feature that allows the clear identification or differentiation of an item or concept from others.

Associated Cost

Costs that are directly linked with a specific activity, process, or project.

Implicit Costs

The opportunity costs that arise from using assets, resources, or funds in a certain way rather than in the next best alternative.

Wheat Farm

A specialized agricultural operation focused on the cultivation and production of wheat.