Identify which of the following statements is true.
A) When adjusting a partner's basis in a partnership interest, the negative basis adjustments are made prior to the positive basis adjustments.
B) Martin and Carlos formed an equal partnership to which Martin contributed $10,000 cash and Carlos contributed a building worth $10,000 with a basis of $2,000. In the first year of operation, the partnership suffered a $10,000 ordinary loss. Martin and Carlos can each deduct a $5,000 loss on their personal tax returns.
C) Any distributive share of a loss that cannot be deducted by a partner because of the Sec. 704(d) basis loss limitation is permanently lost.
D) All of the above are false.
D) All of the above are false.
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Answer the following statement true (T) or false (F)
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