In which type of distribution may a partner recognize a loss on the distribution?
A)Operating distributions.
B)Liquidating distributions.
C)Neither operating nor liquidating distributions.
D)Both operating and liquidating distributions.

Question

Quizplus · Accepted Answer

A partner may recognize a loss on a liquidating distribution if the fair market value of the assets received is less than their outside basis in the partnership. Operating distributions do not typically result in a recognition of loss.

In Which Type of Distribution May a Partner Recognize a Loss