If a Partnership Asset with a Deferred Precontribution Gain Is

question 84

True/False

If a partnership asset with a deferred precontribution gain is distributed within seven years of acquisition in a nonliquidating distribution to a partner who did not contribute the asset, the precontribution gain must be recognized by the contributing partner.

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Definitions:

Legal Title

The official right to ownership of property or assets, recognized and protected by law.

Possession

The state or fact of owning or holding something, either physically or legally.

Deficiency

The lack of a required or necessary quality, amount, or degree, often used in financial contexts to denote a shortfall.

Foreclosure Auction

A public sale at which property is sold to the highest bidder following foreclosure.