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

Question

Quizplus · Accepted Answer

Each of the rationales provided (A, B, C, D) correctly describes a reason for adjusting a partner's basis in a partnership. These adjustments are made to prevent double taxation, ensure tax-exempt income remains untaxed, and manage the tax treatment of nondeductible expenses and cash distributions.

Which of the Following Rationales for Adjusting a Partner's Basis