Asked by Elexxus Wrighton on May 02, 2024
Verified
All income/gain and expense/loss items affect a partner's basis in his or her partnership interest.
Partnership Interest
An ownership share in a partnership, representing a partner's stake in the assets and operations of the business.
- Grasp the tax implications of distributions and adjustments to partnership liabilities on a partner's basis.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
True
Explanation :
According to the general rule of partnership taxation under the Internal Revenue Code, all income/gain and expense/loss items affect a partner's basis in his or her partnership interest. This basis adjustment is important in determining the partner's share of partnership income or loss, as well as any gain or loss realized on a subsequent disposition of the partnership interest.
Learning Objectives
- Grasp the tax implications of distributions and adjustments to partnership liabilities on a partner's basis.
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