Which of the Following Is False Concerning Special Basis Adjustments

question 52

Multiple Choice

Which of the following is false concerning special basis adjustments under Section 754?

• A) Special basis adjustment is an annual election made by the partnership.
• B) Special basis adjustments can occur when a new investor purchases a partnership interest.
• C) Special basis adjustments can occur when a partner recognizes a gain or loss from a distribution.
• D) Special basis adjustments are intended to eliminate discrepancies between inside and outside bases.

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