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

question 44

Multiple Choice

Which of the following statements regarding a partner's tax basis in a partnership interest is true?

• A) Partnership tax basis is increased annually by cash distributions from the partnership.
• B) Partnership tax basis is reduced by the partner's share of nondeductible partnership expenses.
• C) Partnership tax basis is reduced by the partner's share of nontaxable partnership income.
• D) Partnership tax basis becomes negative if allocable losses exceed basis.

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Definitions:

Characteristics

Distinctive features or qualities that identify an individual, group, or thing.

Ethnocide

The calculated and structured dismantling of the cultural traditions of an ethnic community.

Genocide

The deliberate and systematic extermination of a national, racial, political, or cultural group.

State

An organized community living under a unified political system, the government; may refer to the whole country or a specific territory within it.