Which of the Following Is False Concerning Special Basis Adjustments

question 87

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 adjustment is 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:

Blended Families

Families formed by the merging of individuals from previous relationships, bringing together biological and step-relations.

Reconstituted Families

Families that are formed by bringing together the children of previous marriages or relationships.

Highly Involved Relatives

Family members who actively participate or engage significantly in the care, support, or affairs of their loved ones, showing a deep commitment to their wellbeing.

Family Structure

The composition and organization of a family, including the relationships and roles within the household.