Which of the Following Statements Correctly Reflects the Rules Regarding

question 42

Multiple Choice

Which of the following statements correctly reflects the rules regarding proportionate liquidating distributions?

• A)Relief of liabilities is treated as a distribution of cash and will cause recognition of gain if the cash distribution exceeds the partner's basis in the partnership interest.
• B)A partner's basis in distributed unrealized receivables is the lesser of the partnership's basis in the receivables or their fair market value.
• C)The basis of unrealized receivables may be stepped up to their fair market value if the partner has adequate unabsorbed basis.
• D)Assets are deemed distributed in the following order: cash,unrealized receivables,capital assets,and finally inventory.
• E)The partner can recognize gain,but not loss,on a proportionate liquidating distribution.

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Definitions:

Pons

A portion of the brainstem involved in regulating vital functions such as breathing, sleep cycles, and communication between different parts of the brain.

Cerebellum

A part of the brain at the back of the skull in vertebrates, responsible for coordinating and regulating muscular activity.

Thalamus

A vital brain structure that acts as the main relay station for sensory information to the cerebral cortex, excluding smell.

Hypothalamus

A region of the brain responsible for the production of hormones that regulate body temperature, hunger, moods, and the release of hormones from other glands, among other critical functions.