Which of the Following Statements Regarding a Partner's Basis Adjustments

question 31

Multiple Choice

Which of the following statements regarding a partner's basis adjustments is true?

• A) A partner's basis may never be reduced below zero.
• B) A partner must adjust his basis for ordinary income (loss) but not for separately-stated items.
• C) A partnership fine or penalty does not affect a partner's basis.
• D)Relief of partnership debt increases a partner's tax basis.

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Definitions:

Gift

An item given voluntarily to someone without expectation of payment or anything in return as a token of affection or appreciation.

Bribe

An illegal practice involving the offering, giving, receiving, or soliciting of something of value as a way to influence the actions of an individual holding a public or legal duty.

Code of Ethics

A set of principles and rules used by an organization to guide the conduct of its members and decision making.

Integrity

The quality of being honest and having strong moral principles.