Identify Which of the Following Statements Is True

question 8

Multiple Choice

Identify which of the following statements is true.

• A)Distribution of partnership income in the form of cash to partners is generally tax-free to the partners and the partnership.
• B)When partners receive cash distributions from the partnership, they pay taxes on those distributions.
• C)If money distributions exceed the partner's basis in the partnership interest, the partner would have to recognize gain on the distribution from the partnership. Such gain is usually an ordinary gain.
• D)All of the above are true.

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Definitions:

Consolidated Statements

Financial statements that aggregate the financial information of a parent company and its subsidiaries into one comprehensive financial report.

Accrued Interest

Interest that has been incurred but not yet paid.

Interest Dates

The specific dates on which interest payments are made or interest rates are applied to financial instruments or loans.

Investment In Bonds

This is the act of purchasing bonds as a means of investing money, typically for earning interest income and obtaining potential price appreciation.