Partnership liabilities are allocated to the partners in a partnership and are included in a partner’s basis in his or her partnership interest. Increases in a partner’s share of liabilities are treated as a contribution by the partner to the partnership, and decreases in a partner’s share of liabilities are treated as a distribution from the partnership to the partner. T/F

Section 721 provides that no gain or loss is recognized on contribution of property or services in exchange for an interest in a partnership. This is true even when the contributing partners do not have control of 80% or more of the partnership following the exchange. T/F

Monroe, a 1/3 partner, received a guaranteed payment in the current year of $40,000. If partnership income before consideration of the guaranteed payment was $25,000, Monroe’s 1/3 share of partnership income or loss is a $5,000 loss T/F

The least aggregate deferral method is used only if the principal partners do not all have the same tax year and no majority of partners have the same tax year. T/F