A Partner Will Recognize a Loss from a Liquidating Distribution

question 16

True/False

A partner will recognize a loss from a liquidating distribution when the distribution includes only cash, unrealized receivables, and inventory and the partner's outside basis is less than the sum of the bases of the distributed assets.

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Definitions:

Foreseeable

An event or consequence that a reasonable person would expect to occur under the circumstances.

Strict Liability

denotes a legal principle where a party can be held responsible for damages or loss without the plaintiff having to prove negligence or fault.

Punitive Damages

Financial compensation awarded to a plaintiff to punish the defendant for particularly harmful behavior and deter future similar actions.

Inherently Dangerous

Refers to activities or substances that, by their nature, pose a significant risk of harm.