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:

Postanesthesia Care Unit

A specialized unit in a hospital where patients are closely monitored for recovery after undergoing anesthesia, before being transferred to a regular ward or discharged.

Surgery

Invasive medical procedures involving the cutting of a body, either for diagnosis, treatment, or repair of a problem area.

Profuse Bleeding

Excessive loss of blood from the circulatory system in a short period of time.

Emergency

A situation that poses an immediate risk to health, life, property, or environment, requiring urgent intervention.