A partner recognizes gain when he receives cash in excess of his outside basis in a liquidating distribution.

Name: A partner recognizes gain when he receives cash in excess of his outside basis in a liquidating distribution.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When a partner receives cash in excess of his outside basis in a partnership's liquidating distribution, he recognizes gain to the extent of the excess cash received. This gain is treated as capital gain unless otherwise specified by the tax law.

A Partner Recognizes Gain When He Receives Cash in Excess