If a Partner Has a More Than 50 Percent Interest

question 12

True/False

If a partner has a more than 50 percent interest in a partnership, a capital gain resulting from the sale of property by the partner to the partnership will be taxed as ordinary income to the partner, provided the property is not a capital asset to the partnership.

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Definitions:

Flexible Lending Arrangements

Financial agreements that offer adaptable repayment terms to accommodate the borrower's financial situation.

Asset-Based Lending

A type of financing where loans are given based on the value of an individual's or company's assets.

Loan Collateral

Assets or property pledged by a borrower to secure a loan, serving as a guarantee for the lender that the loan will be repaid.

Liquidation Value

The estimated total value of a company's physical assets if it were to be terminated and the assets sold, typically assessed in the context of a business facing bankruptcy.