Identify Which of the Following Statements Is True

question 50

Multiple Choice

Identify which of the following statements is true.

• A)A liquidating distribution that terminates a partnership interest cannot include more than one distribution.
• B)A partnership with a large amount of unrealized receivables and substantially appreciated inventory items liquidated and distributed all of its assets in kind to each partner in proportion to their partnership interests. Each partner will report ordinary income at the time these assets are received equal to their FMV.
• C)The rule for recognizing gain on a liquidating distribution is the same rule that is used for a current distribution.
• D)All of the above are false.

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Definitions:

Limited Powers

Restrictions placed on the authority of an individual or body, permitting them to act only within predefined boundaries.

Congress

The legislative branch of the United States federal government, consisting of the House of Representatives and the Senate.

Unfair Trade Practices

Dishonest or fraudulent business methods that are deemed unjust or deceptive towards consumers.

State Statute

A written law enacted by the legislative body of a state.