Under which of the following circumstances will a partner recognize a gain from an operating distribution?
A)A partner will never recognize a gain from an operating distribution.
B)A partner will recognize a gain from an operating distribution when the partnership distributes property other than money with an inside basis greater than the partner's basis in the partnership interest.
C)A partner will recognize a gain from an operating distribution when the partnership distributes money in an amount that is less than the partner's basis in the partnership interest.
D)A partner will recognize a gain from an operating distribution when the partnership distributes money in an amount that is greater than the partner's basis in the partnership interest.

Question

Quizplus · Accepted Answer

A partner will recognize a gain from an operating distribution when the partnership distributes money in an amount that is greater than the partner's basis in the partnership interest. This is because the partner's basis is reduced by the amount of the distribution and if the distribution exceeds their basis, it results in a gain.

Under Which of the Following Circumstances Will a Partner Recognize