In Partnership Liquidations,what Are Safe Payments

question 46

Multiple Choice

In partnership liquidations,what are safe payments?

• A)The amounts of distributions that can be made to the partners,after all creditors have been paid in full.
• B)The amounts of distributions that can be made to the partners with assurance that such amounts will not have to be returned to the partnership.
• C)The amounts of distributions that can be made to the partners,after all non-cash assets have been adjusted to fair market value.
• D)The amounts of distributions that can be made to the partners during the liquidation based on the partner's contributed capital return.

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Definitions:

Form 6198

An IRS form used by taxpayers to determine the amount of loss from an at-risk activity that is deductible.

IRC

The Internal Revenue Code, which is the comprehensive set of tax laws in the United States governing federal tax obligations.

Active Income/Loss

Income or losses generated from direct business activities or employment, as opposed to passive income from investments.

Passive Income/Loss

Earnings from rental property, limited partnerships, or other enterprises in which the individual is not actively involved.