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.

Understand how participation in management impacts the liability of partners in limited partnerships.

Grasp the concept of pass-through tax entities and how it applies to LLPs.

Understand the rights of partners to access books and information in limited partnerships.

Recognize the implications and conditions under which a partner may lose limited liability status.

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Definitions:

American Sample

A demographic or study group consisting only of individuals from the United States, which may impact the generalization of research findings.

Endogenous Personality Descriptors

Traits or attributes that originate from within the individual, rather than being influenced by external environmental factors.

Lexicon

The vocabulary of a language, or a specific individual or field of study.

Triandis

Harry Triandis, a social psychologist known for his work on individualism and collectivism in cross-cultural psychology.