A partnership is required to make a downward adjustment to the basis of its assets if a partnership interest is sold and if the total decline in value of partnership assets is more than $250,000.

Question

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According to the Internal Revenue Code, a partnership must make a downward adjustment to the basis of its assets if the total decline in value is more than $250,000 when a partnership interest is sold or exchanged. This is required under section 743(b) of the code. Therefore, the statement is true.

A Partnership Is Required to Make a Downward Adjustment to the Basis