On a Nonliquidating Distribution of Cash from a Partnership, the Partner

Multiple Choice

On a nonliquidating distribution of cash from a partnership, the partner will recognize gain if
I.the cash distributed exceeds his/her basis in the partnership.
II.the cash distributed exceeds his/her share of the net income of the partnership for the year.
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A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.