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.

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Definitions:

Federal Trade Commission

A U.S. federal agency established in 1914 to enforce antitrust laws and promote consumer protection.

Teapot Dome Scandal

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Walter Lippmann

An influential American writer, reporter, and political commentator known for being one of the first to introduce the concept of the "cold war" and for his deep analyses of public affairs.