All income/gain and expense/loss items affect a partner's basis in his or her partnership interest.

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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.

All Income/gain and Expense/loss Items Affect a Partner's Basis in His