Which of the following statements regarding hot assets for purposes of disproportionate distributions is false?
A)Hot assets include unrealized receivables.
B)Hot assets include any inventory.
C)Hot assets include substantially appreciated inventory.
D)The definition of hot assets for distributions and sales of partnership interests differs.

Question

Quizplus · Accepted Answer

Hot assets do not include any inventory, only substantially appreciated inventory is considered a hot asset. Hot assets include but are not limited to unrealized receivables, depreciation recapture, and other assets that would result in ordinary income if sold or exchanged. The definition of hot assets for disproportionate distributions and sales of partnership interests is the same.

Which of the Following Statements Regarding Hot Assets for Purposes