Which of the following assets may cause a partner to recognize ordinary income rather than capital gain on the sale of a partnership interest?

Question

Quizplus · Accepted Answer

Inventory is a type of asset that is considered to produce ordinary income rather than capital gain on the sale of a partnership interest. This is because inventory is treated as ordinary income property under the tax code, which means that gains or losses from its sale are classified as ordinary income or loss. Therefore, selling a partnership interest that includes inventory will result in ordinary income rather than capital gain. Land, long-term debt, and buildings placed in service after 1986 may all produce capital gains or losses on the sale of a partnership interest.

Which of the Following Assets May Cause a Partner to Recognize