Which of the Following Statements Regarding Disproportionate Distributions Is False

question 89

Multiple Choice

Which of the following statements regarding disproportionate distributions is false?

• A)A disproportionate distribution occurs when a partner receives more than his proportionate share of the partnership's hot assets.
• B)A disproportionate distribution occurs when a partner receives less than his proportionate share of the partnership's hot assets.
• C)The tax provisions related to disproportionate distributions attempt to preserve the partners' share of ordinary income potential.
• D)Disproportionate distributions will only occur in liquidating distributions.

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Definitions:

365-Day Year

A method of computing interest where the basis for the calculation is a full 365-day year, used to give a more precise daily rate.

360-Day Year

An accounting practice assuming twelve 30-day months, used for simplicity in calculations and financial models.

Exact Simple Interest

Interest calculated based on the principal amount for a specific number of days, using a 365-day year.

365-Day Year

A calendar method that assumes each year has 365 days for the purpose of interest calculation, ignoring leap years.