A Disproportionate Distribution of Hot Assets Is Treated as Though

question 32

True/False

A disproportionate distribution of hot assets is treated as though the partnership distributes a proportionate share of hot assets to the partner and then the partner sells those hot assets back to the partnership at fair market value in exchange for a portion of the assets actually received in the distribution.

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Definitions:

Derivative Suit

A legal action brought by shareholders on behalf of a corporation against third parties, typically for harm done to the corporation.

Corporate Management

The administration and control of a corporation, involving decision-making by executives and oversight by a board of directors.

Newly Issued Stock

Shares that have been recently released by a company to the public for the first time through an initial public offering (IPO) or additional issuance.

Proxy Solicitation

The process by which one shareholder asks another for his or her voting right.