Which of the Following Is False Concerning Special Basis Adjustments

question 31

Multiple Choice

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

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

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Definitions:

Variable Cost

Expenses that change in proportion to the activity of a business, such as costs for raw materials that fluctuate with production volume.

Room Nights

A measure in the hospitality industry, representing the total number of nights that guests have booked to stay in a hotel.

Break-Even Point

The point at which total revenues equal total costs, resulting in neither profit nor loss.

Programmable Watch

A wristwatch with smart capabilities that can be programmed for various functions beyond timekeeping, such as fitness tracking or notifications.