Which of the following statements regarding the rationale for adjusting a partner's basis is false?
A) To prevent partners from being double taxed when they receive cash distributions.
B) To ensure that partnership tax-exempt income is not ultimately taxed.
C) To ensure that partnership non-deductible expenses are never deductible.
D) To prevent partners from being double taxed when they sell their partnership interests.
E) None of these rationales are false.

Question

Quizplus · Accepted Answer

All the statements provided are true rationales for adjusting a partner's basis. Adjusting a partner's basis helps prevent double taxation on distributions and sales, ensures tax-exempt income remains untaxed, and ensures non-deductible expenses are not deducted.

Which of the Following Statements Regarding the Rationale for Adjusting