Partner Bob purchased his partnership interest for $10,000.If Bob sells the partnership interest after three years,his gain or loss is determined by reference to this unadjusted $10,000 cost basis.

Question

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Bob's gain or loss is determined by the adjusted basis, which considers the initial cost basis plus any additional contributions, income allocations, and minus any distributions or losses over the period of ownership.

Partner Bob Purchased His Partnership Interest for $10,000