Asked by Kesha Boston on Jul 02, 2024
Verified
Nondeductible partnership items do not decrease a partner's basis in the partnership interest.
Nondeductible Items
Expenses or items that cannot be subtracted from gross income to reduce taxable income according to tax laws.
Partnership Interest
An ownership share in a partnership that entitles the holder to a portion of the entity's profits and losses.
- Understand the impact of nondeductible expenses and nonrecognition items on a partner's basis and partnership's operations.
Verified Answer
YR
yurinia ramos1 week ago
Final Answer :
False
Explanation :
Nondeductible partnership items, such as certain expenses and penalties, do decrease a partner's basis in the partnership interest, as they represent the partner's share of the partnership's expenses that cannot be deducted on the partner's individual tax return.
Learning Objectives
- Understand the impact of nondeductible expenses and nonrecognition items on a partner's basis and partnership's operations.