Which of the following items will affect a partner's tax basis?
A) Share of qualified nonrecourse debt.
B) Share of ordinary business income (loss).
C) Share of nonrecourse debt.
D) Share of recourse debt.
E) All of the choices will affect a partner's tax basis.

Question

Quizplus · Accepted Answer

All of the choices listed will affect a partner's tax basis, although each item will impact the basis calculation differently. For example, a partner's share of qualified nonrecourse debt increases their tax basis, while a share of ordinary business loss decreases their tax basis. The ability to deduct losses or receive tax-free distributions is impacted by the partner's tax basis in the partnership.

Which of the Following Items Will Affect a Partner's Tax