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.