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:

Avoidance-Avoidance

A psychological conflict that occurs when a person needs to choose between two undesirable options.

Negative Outcome

An undesired or unfavorable result in a particular situation, often differing significantly from the expected or intended outcome.

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The process by which parties come to an agreement on business matters, involving discussion and compromise to achieve a decision that is acceptable to all involved.

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A country in Central Europe, known for its rich history, culture, and contributions to art, science, and economy.