Under Which of the Following Circumstances Will a Partner Recognize

question 42

Multiple Choice

Under which of the following circumstances will a partner recognize a loss from an operating distribution?

• A)A partner will never recognize a loss from an operating distribution.
• B)A partner will recognize a loss from an operating distribution when the partnership distributes property other than money with an inside basis greater than the partner's basis in the partnership interest.
• C)A partner will recognize a loss from an operating distribution when the partnership distributes money in an amount that is less than the partner's basis in the partnership interest.
• D)A partner will recognize a loss from an operating distribution when the partnership distributes money in an amount that is greater than the partner's basis in the partnership interest.

---

Definitions:

Bond Financing

Raising capital for a business or governmental entity through the issuance of bonds, which are debt securities that must be repaid with interest.

Owner Control

The level of power and authority held by the owner(s) of a business in making significant decisions about its operations.

Lessee

A person or entity that rents or leases property from another, known as the lessor, under the terms of a lease agreement.

Lessor

The party that leases or rents out a property or asset to another party, known as the lessee.