Match the following independent distribution payments in liquidation of a partner's interest in an ongoing partnership with the statements below.
-Distribution of $10,000 cash to a limited partner for goodwill when goodwill is not provided for in the partnership agreement.
A)A payment for the partner's share of partnership income under § 736a).
B)A payment for the partner's share of partnership property under § 736b).
C)The payment includes both a § 736a) and a § 736b) element.

Question

Quizplus · Accepted Answer

This payment is considered a distribution for the partner's share of partnership property under § 736(b) because it is a liquidating payment not related to the partner's share of partnership income and is made for an interest in the partnership's goodwill, which is a capital asset.

Match the Following Independent Distribution Payments in Liquidation of a Partner's