A Nonliquidating Distribution of Cash or Property from the Partnership

question 135

True/False

A nonliquidating distribution of cash or property from the partnership to a partner is generally treated as a tax-free return of capital to the extent of a partner's basis.

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Definitions:

Trustees

Individuals or organizations appointed to manage and oversee assets or property for the benefit of others, often in a legal or fiduciary capacity.

Beneficiaries

Individuals or entities designated to receive benefits or assets from a trust, will, or insurance policy.

Jurisdiction

The official power to make legal decisions and judgments, or the territorial range over which such authority extends.

Limited Liability Company

A company framework that integrates the advantageous tax treatment of partnerships or sole proprietorships with the protective aspect of limited personal liability akin to corporations.