Which of the following distributions would never result in gain recognition to the recipient partner?
A)A distribution of cash that follows a contribution of appreciated property to the partnership.
B)A distribution of a slightly appreciated marketable security.
C)A distribution of property to a partner who, three years ago, contributed other property with a built-in gain.
D)A distribution to a second partner of property contributed by the first partner two years ago.
E)A proportionate distribution of inventory property.

Question

Quizplus · Accepted Answer

A proportionate distribution of inventory property would not result in gain recognition because the distribution of property with built-in gain or appreciated property triggers gain recognition. The contribution and distribution of inventory property do not exhibit either of these characteristics.

Which of the Following Distributions Would Never Result in Gain