58. Under which of the following circumstances will a partner recognize a loss f

Question

58. Under which of the following circumstances will a partner recognize a loss from a non-liquidating distribution?

A. A partner will never recognize a loss from a non-liquidating distribution.

B. A partner will recognize a loss from a non-liquidating distribution when the partnership distributes property other than money with an inside basis greater than the partner's basis in the partnership interest.

C. A partner will recognize a loss from a non-liquidating distribution when the partnership distributes money in an amount that is less than the partner's basis in the partnership interest.

D. A partner will recognize a loss from a non-liquidating distribution when the partnership distributes money in an amount that is greater than the partner's basis in the partnership interest.

Explanation / Answer

Answer would be Option C

A partner will recognize a loss from a non-liquidating distribution when the partnership distributes money in an amount that is less than the partner's basis in the partnership interest. Money shall also include unrealized recievables and invenotry.

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