All of the following statements are true with regard to the formation of a partnership except:
A)The partnership's basis in the transferred property carries over from the transferor partners.
B)With regard to capital assets and 1231 assets,the partnership's holding period for the transferred property includes the contributing partner's holding period.
C)The nonrecognition rules apply to both property and services contributed to a partnership.
D)A transfer of property in exchange for a partnership interest causes nonrecognition of gain or loss treatment.

Question

Quizplus · Accepted Answer

The nonrecognition rules apply only to property contributed to a partnership, not to services. When services are contributed, the contributing partner may recognize income.

All of the Following Statements Are True with Regard to the Formation