All of the Following Statements Are True Regarding Nonliquidating Distributions

question 25

Multiple Choice

All of the following statements are true regarding nonliquidating distributions of a partnership except:

• A)If money is distributed in excess of the partnership interest,the partner receiving the distribution has capital gain.
• B)In no circumstances will the partner or the partnership recognize gain or loss from a nonliquidating distribution.
• C)In no circumstances may the partner's basis in the partnership interest be reduced below zero as a result of a nonliquidating distribution.
• D)If,after money distributions reduce the partnership basis,the adjusted basis of distributed property does not exceed the partner's basis in the partnership interest,the basis of the distributed property carries over to the partner.

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Definitions:

Variables

Elements or factors that can change and affect the outcome of a study or experiment.

Inductive Reasoning

A logical process in which multiple premises, all believed true or found true most of the time, are combined to arrive at a specific conclusion.

Deductive Reasoning

A logical process in which a conclusion follows necessarily from the premises presented, moving from general premises to a specific conclusion.

Research Question

A question that outlines the problem or issue that a study aims to address, guiding the research process.