On a Nonliquidating Distribution of Cash from a Partnership, the Partner

question 65

Multiple Choice

On a nonliquidating distribution of cash from a partnership, the partner will recognize gain if
I.the cash distributed exceeds his/her basis in the partnership.
II.the cash distributed exceeds his/her share of the net income of the partnership for the year.
​

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.