In a proportionate current (nonliquidating) distribution of cash and a capital asset, the partner recognizes gain to the extent the amount of cash plus the fair market value of property distributed exceeds the partner's basis in the partnership interest.

Question

Quizplus · Accepted Answer

In a proportionate nonliquidating distribution, a partner generally does not recognize gain unless the cash received exceeds the partner's basis in the partnership interest. The distribution of property (other than cash) does not by itself trigger gain recognition.

In a Proportionate Current (Nonliquidating) Distribution of Cash and a Capital