Identify Which of the Following Statements Is True

question 74

Multiple Choice

Identify which of the following statements is true.

• A)The contribution of Sec. 1245 property to a partnership triggers recognition of ordinary income by the contributor at the time of the transfer.
• B)A partner may not recognize ordinary income when receiving a capital and profits interest in a partnership in exchange for services.
• C)When a partnership interest is given to a partner in exchange for services, the partnership can deduct or capitalize the FMV of the services, depending on the nature of the services.
• D)All of the above are false.

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Definitions:

Berea College

A liberal arts college located in Kentucky, notable for being the first coeducational and racially integrated college in the Southern U.S.

Racial Integration

The process of ending racial segregation, involving the bringing together of races in a harmonious, unified manner.

Supreme Court

The highest judicial body in a country, typically having the ultimate authority over all other courts and adjudicating in the final appeal cases.

Reinforcer

Any stimulus that strengthens or increases the frequency or likelihood of a behavior when it occurs.