Which of the Following Statements Is True Regarding the Sale

question 45

Multiple Choice

Which of the following statements is true regarding the sale of a partnership interest?

• A)The selling partner's share of partnership liabilities is disregarded in determining the proceeds from the sale of a partnership interest.
• B)For purposes of computing the selling partner's gain or loss, the partner's basis in the partnership interest is determined as of the last day of the partnership tax year ending before the year in which the interest is sold.
• C)If a partner sells an interest in a partnership, income related to that interest for the year of the sale is allocated to the purchaser.
• D)The selling partner could be required to report both ordinary income and a capital loss on sale of the partnership interest.
• E)The partner's share of partnership "hot assets" is disregarded in determining the character of the partner's gain on the sale of the partnership interest.

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Definitions:

Partition

The division of a computer's hard drive or a space within a room or area into separate sections.

Classification

is the process of grouping items or ideas based on shared characteristics or criteria.

General-to-Specific

A method of organization or argumentation that begins with broad observations and narrows down to more detailed points or specifics.

Criteria

Standards or benchmarks against which decisions are made or outcomes are evaluated.