A Two-Person Partnership Terminates When One Partner Sells His, Her

question 78

True/False

A two-person partnership terminates when one partner sells his, her, or its partnership interest to the other partner.
This termination triggers a deemed liquidating distribution to the partners, and a tax on the realized gain fair market value less partnership basis) in the partnership's assets.

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Definitions:

Festinger

Leon Festinger was a social psychologist known for his theory of cognitive dissonance, which describes the discomfort felt when holding conflicting beliefs, attitudes, or behaviors.

Psychology Text

A written or digital publication concerning the study of the mind and behavior, often used for educational purposes.

Cognitive Dissonance

A psychological state that describes the uncomfortable feeling when a person holds two or more conflicting cognitions, beliefs, attitudes, or values at the same time.

Operant Conditioning

A type of learning in which the consequences of behavior are manipulated so as to increase or decrease the frequency of an existing response or to shape an entirely new response.