When a Partner Receives a Cash Distribution from a Partnership

question 60

True/False

When a partner receives a cash distribution from a partnership, the distribution is never taxable even if the amount of cash received is greater than the partner's basis in the partnership.

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Definitions:

Good-faith Purchaser

Someone who buys property without knowledge of any existing claims or defects against it, thus acquiring free and clear ownership.

Voidable

Describes a contract or transaction that may appear to be valid but can be legally declared void by one of the parties to the contract for reasons such as fraud or coercion.

Good Title

refers to a legal term meaning ownership of property is legally valid, with no encumbrances or disputes that could question rightful ownership.

CIF

"Cost, Insurance, and Freight," a term used in international shipping agreements where the seller is responsible for the transportation costs, insurance, and freight charges to the designated port.