A gain will only arise on a distribution of cash that exceeds the partner's basis in the partnership interest.For this purpose, only cash, checks, and credit card charges are treated as cash.

Question

Quizplus · Accepted Answer

For tax purposes, cash includes not only physical currency but also checks and credit card charges. However, the statement is incorrect because a gain can arise from other distributions, not just cash, that exceed the partner's basis.

A Gain Will Only Arise on a Distribution of Cash