Problem regarding creating taxable gain


All of the following distributions could create taxable gain, except one. Which one will NOT create taxable gain upon a distribution?

A. A distribution of property to a partner who, three years ago, contributed other property with a built-in gain

B. A proportionate distribution of inventory property.

C. A distribution of appreciated marketable security.

D. A distribution of cash that follows a contribution of appreciated property to the partnership.

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Accounting Basics: Problem regarding creating taxable gain
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