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Which of the following is true concerning a partner's basis in assets (other than money) distributed in an operating distribution?

a. A partner's bases in the distributed assets will be equal to the partnership's bases in the assets.
b. A partner's bases in the distributed assets will be less than or equal to the partnership's bases in the assets.
c. A partner's bases in the distributed assets will be greater than the partnership's bases in the assets.
d. None of the statements are true.

1 Answer

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Final answer:

A partner's bases in the distributed assets will be less than or equal to the partnership's bases in the assets. option b

Step-by-step explanation:

The statement that is true concerning a partner's basis in assets (other than money) distributed in an operating distribution is option b. A partner's bases in the distributed assets will be less than or equal to the partnership's bases in the assets.

When a partner receives assets in a distribution, their basis in those assets is generally the same as the partnership's basis in those assets at the time of the distribution. However, there are certain limitations that can reduce a partner's basis, such as deficit capital accounts or the partner's share of partnership liabilities.

It is important to note that a partner's basis in the distributed assets cannot exceed the partnership's basis in those assets. Option b

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