True or False

Indicate whether each statement is true or false:

_________	B contributes her business property to AB partnership. The property has a market value of $2,000 and a basis of $1,500. As a result of the contribution, B recognizes a $500 gain. The partnership inherits a $2,000 basis in the property.
_________	The partnerships holding period for assets contributed to the partnership by a partner begins with the date the assets are contributed.
_________	When a partners share of debt is decreased, the reduction is treated as a cash distribution from the partnership to the partner.
_________	Partners may agree to specially allocate any existing revenue, expense, or other partnership item in any way they wish when (a) they have owned their interest in the partnership for the entire year, and (b) the allocation has a substantial economic effect. (Assume all partners contributed cash for their capital interests.)
_________	An individual who contributes services in exchange for an unrestricted capital interest in a partnership has includible ordinary income equal to the fair market value of the capital interest.
_________	An individual who contributes services in exchange for an interest in the future profits of a newly formed partnership does not recognize income on the receipt of the interest.
_________	A has been a partner in the ABC Partnership for only four months. During the current year, the partnership sold investment land that it purchased six years ago and recognized a $100,000 gain. As distributive share of this gain is long-term capital gain.
_________	The portion of a partners distributive share of losses that exceeds the partners basis may be carried forward indefinitely and deducted in a later year or years when that partners basis is increased.
_________	A partnership may enter into taxable transactions with its partners.
_________	A partner never recognizes loss upon the receipt of a current distribution from a partnership.
_________	A retiring partner who receives a liquidating distribution of cash as payment for her share of partnership substantially appreciated inventory must recognize ordinary income equal to the excess of the fair market value of her proportionate share of the inventory over her proportionate share of the inside basis of the inventory.
_________	Current cash distributions from partnerships are nontaxable unless they exceed the partners basis in the partnership.
_________	A guaranteed payment from a partnership always represents ordinary income to the recipient partner.
_________	S owns a 30% interest in the capital and profits of ST partnership. S sold land ($5,000 basis) to ST partnership for its fair market value of $3,000. Ss $2,000 loss will be disallowed to him.