Identify Which of the Following Statements Is True

question 68

Multiple Choice

Identify which of the following statements is true.

• A)If a partner sells property received in a partnership distribution for a gain and the property was inventory in the hands of the distributing partnership, the partner will always recognize ordinary income.
• B)The primary purpose of Sec. 751 is to prevent partnerships from converting capital gains into ordinary income.
• C)Unrealized receivables include rights to payments on the sale of a capital asset.
• D)All of the above are false.

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Definitions:

British Loyalists

Were colonists in America who remained loyal to the British throne during the American Revolutionary War.

Cherokee

The Cherokee are a Native American people historically settled in the southeastern United States, now primarily in Oklahoma and North Carolina, known for their rich culture, language, and forced relocation events like the Trail of Tears.

Gold

A chemical element with the symbol Au, gold is a precious metal known for its use in jewelry, currency, and various industrial applications due to its conductivity and resistance to corrosion.

Worcester V. Georgia

A U.S. Supreme Court case in 1832 that held that Native American nations were distinct communities with the right to maintain lands independent of state laws.