Which of the Following Statements Is Always Correct Regarding Assets

question 12

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.

---

Definitions:

Franklin Roosevelt

The 32nd President of the United States, serving from 1933 to 1945, known for his leadership during the Great Depression and World War II, and for establishing the New Deal to address economic hardship.

New Deal Era

The period in United States history during the 1930s when President Franklin D. Roosevelt implemented the New Deal programs to counteract the effects of the Great Depression.

Native Americans

Native Americans are the indigenous peoples of the United States, including various tribes and nations that occupied the land prior to European colonization.

Supreme Court

The highest judiciary body in a country or jurisdiction, which has the ultimate authority in interpreting laws and the constitution.