Which of the Following Statements Regarding a Partner's Basis Adjustments

question 2

Multiple Choice

Which of the following statements regarding a partner's basis adjustments is true?

• A) A partner must adjust his basis for ordinary income (loss) but not for separately-stated items.
• B) A partnership fine or penalty paid by the partnership does not affect a partner's basis.
• C) A partner's basis may never be reduced below zero.
• D) Relief of partnership debt increases a partner's tax basis.

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Definitions:

Human Being

A member of the species Homo sapiens, characterized by a capacity for language, reasoning, and the creation of complex cultures.

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The fatty layer enveloping axons of some neurons that increases the speed at which impulses propagate along the myelinated fiber.

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