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:

Term Deposit

A fixed-term investment held at a financial institution where money can be invested for a certain period of time, earning a predetermined interest rate.

Simple Interest

Interest measured solely on the primary amount, not factoring in compounding.

Per Annum

Annually; indicating an amount or a statistical value per year.

Equivalent

Identical in worth, quantity, role, significance, and so forth.