Question

The character of a partner's distributive share of a partnership item of income, gain, loss, credit, or deduction that the partner must take into account separately is determined as if the partner had realized it directly from the same source or incurred it in the same manner as it was realized or incurred by the partnership.

		False.
		True.

Answer 1

the following explaination will give you clarity about there distributive shares

Generally, the partnership agreement determines a partner's distributive share of any item or class of items of income, gain, loss, deduction, or credit. The allocations provided for in the partnership agreement or any modification will be disregarded if they do not have substantial economic effect. If an allocation does not have substantial economic effect or the partnership agreement does not provide for the allocation, the partner's distributive share of the partnership items is determined by the partner's interest in the partnership.

Substantial economic effect. An allocation has substantial economic effect if both of the following tests are met.

1. There is a reasonable possibility that the allocation will substantially affect the dollar amount of the partners' shares of partnership income or loss independently of tax consequences.
2. The partner to whom the allocation is made actually receives the economic benefit or bears the economic burden corresponding to that allocation.