A partnership sells an asset for a gain. The asset had been transferred to the partnership two years ago by Partner J in exchange for a partnership interest. The asset was worth substantially more than its cost as of the transfer date. The partnership gain will be allocated to all of the partners in accordance with their profit and loss sharing ratios.
Answer the following statement true (T) or false (F)
False
The portion of the gain attributable to pre-contribution appreciation will be specially allocated to the contributing partner. The balance of the gain will be allocated in accordance with the profit and loss sharing ratios.
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