Which of the Following Statements Regarding Liquidating Distributions Is True

question 59

Multiple Choice

Which of the following statements regarding liquidating distributions is true?

• A)A partner will recognize a gain when the partnership distributes only money and the amount is greater than the partner's outside basis.
• B)A partner will recognize a gain when the partnership distributes only money and hot assets and the inside bases of the distributed assets are greater than the partner's outside basis.
• C)A partner will recognize a gain when the partnership distributes money, hot assets, and other property and the inside bases of the distributed assets are greater than the partner's outside basis.
• D)A partner will recognize a gain when the partnership distributes only money and the amount is less than the partner's outside basis.

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Definitions:

Process Theories

Theories that focus on the psychological and behavioral processes that motivate individuals to achieve certain goals.

Content Theories

Theories that focus on identifying the specific factors, such as needs or desires, that motivate people.

Invisible Hand

A metaphor used by economist Adam Smith to describe the self-regulating behavior of the marketplace.

Free Market

An economic system where prices for goods and services are determined by open market and competition, without intervention from government.