Javier is retiring from the JKL Partnership. In January of the current year, he has a $100,000

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Javier is retiring from the JKL Partnership. In January of the current year, he has a $100,000 basis in his partnership interest when he receives a $10,000 cash distribution. The partnership plans to distribute $10,000 each month this year, and Javier will cease to be a partner after the December payment. Is the January payment to Javier a current distribution or a liquidating distribution?



A.

It is a current distribution. A liquidating distribution is a distribution that terminates the partner's interest in the partnership by making a series of payments intended to terminate the partner's interest in the partnership. A current distribution is made with the intention of terminating the partner's entire interest in the partnership with a planned series of payments.



B.

It is a current distribution. A current distribution is a distribution that does not terminate the partner's interest in the partnership, nor is the payment one of a series of payments intended to terminate the partner's interest in the partnership. A liquidating distribution is made with the intention of terminating the partner's entire interest in the partnership with a lump-sum payment to the partner.



C.

It is a liquidating distribution. A current distribution is a distribution that terminates the partner's interest in the partnership by making a series of payments intended to terminate the partner's interest in the partnership. A liquidating distribution is made with the intention of terminating the partner's entire interest in the partnership with a planned series of payments.



D.

It is a liquidating distribution. A current distribution is a distribution that does not terminate the partner's interest in the partnership, nor is the payment one of a series of payments intended to terminate the partner's interest in the partnership. A liquidating distribution is made with the intention of terminating the partner's entire interest in the partnership either with this payment or with a planned series of payments including this one.
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