When a Partnership Distributes Property That Has a Fair Market

question 93

True/False

When a partnership distributes property that has a fair market value greater than its basis, the partnership must recognize the income as if it sold the property.

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Definitions:

Debits

Financial transactions representing increases in assets or expenses or decreases in liabilities, equity, and income.

Credits

Entries made in the accounting records to increase liabilities or revenues, or to decrease assets or expenses.

Accounts Payable

Liabilities representing amounts owed by a company to suppliers or creditors for goods and services received.

Prepaid Insurance

An asset account on the balance sheet representing insurance premiums that have been paid in advance and have not yet expired.