Which of the Following Statements Regarding Capital and Profit Interests

question 36

Multiple Choice

Which of the following statements regarding capital and profit interests received for services contributed to a partnership is false?

• A)The holding period of a capital or profits interest begins on the date the interest is received.
• B)Partners receiving capital interests must recognize the liquidation value of their capital interests as capital gain.
• C)Partners receiving only profits interests generally don't recognize income when the profits interest is received.
• D)Partners receiving only profits interests include their share of partnership debt in the tax basis of their partnership interest.

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Definitions:

Set of Data

A collection of data points or elements that have been systematically gathered for analysis or observation.

Mode

In a series of data, the value that shows up the most.

Letter Grades

Symbols used in educational systems to represent the quality of a student's performance.

Median

The middle value in a data set when the values are arranged in ascending or descending order, or the average of two middle numbers if the dataset has an even number of observations.