What Is the Correct Order for Applying the Following Three

question 89

Multiple Choice

What is the correct order for applying the following three items to adjust a partner's tax basis in his partnership interest: (1) Increase for share of ordinary business income, (2) Decrease for share of separately stated loss items, and (3) Decrease for distributions?

• A)1, 3, 2
• B)1, 2, 3
• C)3, 1, 2
• D)2, 3, 1

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Definitions:

Price High

Typically refers to a situation where the price of a good or service is higher than usual, which can result from high demand, low supply, or other market conditions.

Positive-Sum Game

A situation in economic transactions where all participants can benefit, or the sum of the gains and losses is positive.

Payoff Matrix

A table that displays the potential outcomes for each player in a game, given the choices of all players.

Gains and Losses

The difference between the amount earned and the amount spent in buying, operating, or producing something.