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Flashcards in Partnership Taxation Deck (34)
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31

When can a LOSS occur in a partnership distribution?

Only in a liquidating distribution.

32

What are the requirements for recognizing a gain in a partnership liquidating distribution?

1. Money was distributed
2. Unrealized receivables were distributed
3. Appreciated inventories were distributed

Otherwise; no loss recognized.

33

What is a hot asset?

Unrealized receivable

34

If partners do not elect a tax year, which year do they use?

A tax year of one or more partners with more than a 50% interest in earnings and profits