Which of the Following Items Decreases a Partner's Basis in His

question 23

Multiple Choice

Which of the following items decreases a partner's basis in his or her partnership interest?

• A)A cash distribution from the partnership.
• B)A nondeductible expense that flows through from the partnership.
• C)A release from partnership liabilities.
• D)All of these.

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Definitions:

Cost of Merchandise Sold

The direct costs tied to producing the goods that a company sells, thus a direct reflection of the cost of inventory sold.

Gross Profit

The difference between revenue and the cost of goods sold, excluding other operating expenses and taxes.

Income from Operations

The profit earned from a company's everyday business activities, excluding income from other sources and expenses like taxes and interest.

Operating Expenses

The costs associated with the day-to-day activities of running a business, not including the cost of goods sold.