Identify Which of the Following Statements Is True

question 33

Multiple Choice

Identify which of the following statements is true.

• A)If a partnership asset with a deferred precontribution gain is distributed in a nonliquidating distribution to the partner who contributed the asset, the precontribution gain must be recognized by the partner.
• B)The partner's basis in the partnership interest is normally reduced by the FMV of property distributed in a nonliquidating distribution.
• C)When a current distribution from a partnership reduces the basis of the partnership interest to zero, the partner's interest in the partnership is terminated.
• D)All of the above are false.

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Definitions:

National Saving

The total amount of saving in a country, comprising both private and public saving.

Index Funds

Mutual funds or exchange-traded funds (ETFs) designed to follow certain preset rules so that the fund can track a specified basket of underlying investments.

Managed Mutual Funds

Programs invested in by shareholders that operate with a mix of different investments, all overseen by experienced investment professionals.

Rate of Return

The increase or decrease in the value of an investment during a particular time frame, presented as a percentage of the investment’s original price.