Miguel Contributed Substantially Appreciated Property to the MR Partnership in Year

question 128

Multiple Choice

Miguel contributed substantially appreciated property to the MR Partnership in year 1. In year 4, other property was distributed to Miguel. Which one of the following statements is most likely to be true regarding the contribution and/or distribution?

• A) Miguel recognizes precontribution gain in year 4 when the second property is distributed to him.
• B) Miguel recognizes the precontribution gain on an amended tax return for year 1 when the second property is distributed to him.
• C) The partnership recognizes the precontribution gain in year 4 and allocates that gain to all the partners.
• D) The partnership recognizes the precontribution gain in year 1 and allocates that gain to Miguel.
• E) Partnership contributions and distributions are tax-deferred transactions; when no cash is involved, no gain or loss is recognized.

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Definitions:

Retirement

The act of leaving one's job and ceasing to work, typically due to reaching a certain age or for health reasons.

Intrasender Role Conflict

A situation where conflicting expectations arise from the same source, leading to tension and difficulty in role fulfillment.

Interrole Conflict

A situation where an individual faces incompatible demands from different roles they are expected to fulfill.

Intersender Role Conflict

A situation in which conflicting expectations arise from two or more roles within different departments or groups.