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:

Olfactory Epithelium

The specialized tissue within the nasal cavity responsible for detecting odors via sensory cells.

Semicircular Canal

Part of the inner ear involved in maintaining balance and sensing head rotation.

Cochlea

A spiral-shaped, fluid-filled inner ear structure that is responsible for converting sound waves into nerve impulses to be sent to the brain.

Cochlear Implant

A medical device that bypasses damaged structures in the inner ear and directly stimulates auditory nerve fibers to provide a sense of sound to individuals who are profoundly deaf or severely hard-of-hearing.