Which of the following assets may cause a partner to recognize ordinary income rather than capital gain on the sale of a partnership interest?
A)land
B)marketable securities
C)inventory
D)buildings which have been placed in service after 1986

Question

Quizplus · Accepted Answer

If the partnership holds inventory, the sale of the partnership interest will result in ordinary income for the partner, rather than capital gain. This is because inventory is considered to be primarily attributable to the ordinary income of the partnership. The other assets listed (land, marketable securities, buildings placed in service after 1986) would generally result in capital gain treatment upon the sale of a partnership interest.

Which of the Following Assets May Cause a Partner to Recognize