Which of the Following Transactions Will Not Result in the Termination

question 72

Multiple Choice

Which of the following transactions will not result in the termination of a partnership for Federal tax purposes?

• A) The partnership is incorporated.
• B) The sole surviving partner buys the interest of the deceased second partner through a buy-sell agreement taking place upon the second partner's death.
• C) Cash is distributed in liquidation of a 60% partner's interest in a five-partner partnership.
• D) A 40% interest in partnership capital and profits is sold to the other partner in a two-partner partnership.
• E) All of these terminate the partnership.

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Definitions:

Creative Thinker

An individual who is capable of thinking in unique and innovative ways to solve problems or create new concepts.

Analyzing Ideas

The process of examining concepts or proposals in detail to understand their structure and evaluate their merit.

Mediator

A neutral individual who facilitates negotiation and agreement between disputing parties without providing legal judgment.

Critical Thinking Skill

The ability to analyze facts, generate and organize ideas, defend opinions, make comparisons, draw inferences, evaluate arguments, and solve problems.