Video: Partnerships: Distributions & Liquidation - Practice Questions

In this lesson, Nick Palazzolo, CPA, walks through a selection of multiple-choice questions on partnerships, specifically focusing on distributions and the tax implications of liquidating and non-liquidating distributions. He methodically breaks down the calculation of a partner's basis in the partnership before and after distributions, including how to determine the tax impact of cash and property distributions. Through examples, Nick demonstrates how the distributed amount exceeding a partner's basis can result in a capital gain. He also demystifies the process of determining a partner's basis in the property received after a distribution. Engaging with the lesson's detailed scenarios will solidify your understanding of these key partnership concepts, which Nick emphasizes as essential for the exam.