Which of the Following Statements Is Always Correct Regarding Assets

question 46

Multiple Choice

Which of the following statements is always correct regarding assets acquired by a newly formed partnership? If a partner contributes:

• A)Depreciable property: the partnership treats the property as newly acquired depreciable property, and may claim a § 179 deduction.
• B)Unrealized (cash-basis) receivables: the partnership will report a capital gain when the receivable is collected.
• C)Inventory (in the partner's hands): the partnership reports ordinary income if the property is held as a capital asset and sold within five years of the contribution date.
• D)Land valued at less than its basis: the partnership reports a § 1231 loss if the property is sold at a loss.
• E)None of these statements is correct.

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Definitions:

Square Root

A number that, once squared, equals the number it originated from.

Pythagorean Theorem

A mathematical principle that establishes a relationship between the lengths of the sides of a right triangle, stating that the square of the length of the hypotenuse is equal to the sum of the squares of the lengths of the other two sides.

Radical Equation

A mathematical equation that involves a radical, where the variable is inside a root, such as a square root or cube root.

Graphing Calculator

A handheld or software tool that plots graphs, solves equations, and performs other mathematical calculations.