Multiple Questions Answers

1) The total bases of all distributed property in the partner's hands following a nonliquidating distribution is limited to
A. the FMV of the property distributed 
B. the partner's predistribution basis in his partnership interest 
C. the partnership's bases in the distributed property 
D. the predistribution FMV of the partner's partnership interest 

2) Identify which of the following statements is true.
A. The basis for property distributed by a partnership cannot be increased above the carryover basis amount when it is received by a partner in a nonliquidating distribution. 
B. A partner's partnership capital account balance cannot be less than zero. 
C. The length of time a partner owns a partnership interest is relevant when determining the holding period for distributed property. 
D. All are false. 

3) Identify which of the following statements is true.
A. The partner's basis in the partnership interest is normally reduced by the FMV of property distributed in a nonliquidating distribution. 
B. If a partnership asset with a deferred precontribution gain is distributed in a nonliquidating distribution to the partner who contributed the asset, the precontribution gain must be recognized by the partner. 
C. When a current distribution from a partnership reduces the basis of the partnership interest to zero, the partner's interest in the partnership is terminated. 
D. All are false. 

4) Which one of the following is not one of the corporation-related requirements for S corporation status?
A. The corporation must not have any foreign-sourced income. 
B. The corporation must be a domestic corporation. 
C. The corporation must not be an ineligible corporation. 
D. The corporation must have only one class of stock.