Generally, gain is not recognized on contribution of appreciated property to a partnership. Which of the following situations may be an exception to that general rule? PICK ALL THAT APPLY!!! Question 1 options: The contributing partner contributes appreciated property to the partnership and shortly after receives a large distribution of cash from the partnership so that most of the partner's interest in the partnership is liquidated. The exchange appears to essentially be a partial sale of the property through the partnership form. The partner contributes appreciated property to a partnership and the partner is not in control of the partnership (over 50% ownership). A partner receives a capital interest for services performed for the partnership. The partner contributes a property to the partnership that is encumbered by a recourse liability, the partnership assumes the liability, and the net effect of these is to take the partner's outside basis below $0
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Generally, gain is not recognized on contribution of appreciated property to a partnership. Which of the following situations may be an exception to that general rule?
PICK ALL THAT APPLY!!!
Question 1 options:
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The contributing partner contributes appreciated property to the partnership and shortly after receives a large distribution of cash from the partnership so that most of the partner's interest in the partnership is liquidated. The exchange appears to essentially be a partial sale of the property through the partnership form. |
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The partner contributes appreciated property to a partnership and the partner is not in control of the partnership (over 50% ownership). |
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A partner receives a capital interest for services performed for the partnership. |
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The partner contributes a property to the partnership that is encumbered by a recourse liability, the partnership assumes the liability, and the net effect of these is to take the partner's outside basis below $0 |
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