Generally,gain is recognized on a proportionate current or liquidating distribution only if the cash distributed exceeds the partner's basis in the partnership interest.

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This statement is true. According to IRS rules, when a partner receives a distribution from a partnership, the distribution may be a current distribution or a liquidating distribution. Gain is recognized on a proportionate basis only if the cash received exceeds the partner's basis in the partnership interest. If the cash distributed is less than or equal to the partner's basis in the partnership interest, the distribution is treated as a return of basis and no gain is recognized.

Generally,gain Is Recognized on a Proportionate Current or Liquidating Distribution