Match the following independent distribution payments in liquidation of a partner's interest in an ongoing partnership with the statements below.
-Distribution of cash of $100,000, representing the partner's share of the value of partnership equipment which has potential depreciation recapture of $25,000.
A)A payment for the partner's share of partnership income under § 736(a).
B)A payment for the partner's share of partnership property under § 736(b).
C)The payment includes both a § 736(a) and a § 736(b) element.

Question

Quizplus · Accepted Answer

This payment represents the partner's share of partnership property under § 736(b) and not income under § 736(a) because it is based on the value of partnership equipment and not on income. Additionally, there is no mention of any goodwill or other intangible value associated with the partnership that would fall under § 736(a). There is also no indication that the payment includes both a § 736(a) and a § 736(b) element.

Match the Following Independent Distribution Payments in Liquidation of a Partner's