Which is not true regarding the optional basis adjustment

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Problem 1: Which of the following is "not" true regarding the optional basis adjustment?

Option 1: once the election is made, the basis adjustment applies only to the transactions the partnership chooses.

Option 2: the basis adjustment may be positive (increase) or negative (decrease)

Option 3: The basis adjustment may not affect all partners of the partnership in the same way.

Option 4: The election is made by the partnership.

Problem 2: Basil has a basis in her partnership interest of $18,000 and receives a distribution in complete liquidation of her interest of $24,000 in cash. The adjustment made by the partnership to its remaining assets if the optional basis adjustment election is in the effect is:

Option 1: 10,000 increase

Option 2: $10,000 decrease

Option 3: $6,000 decrease

Option 4: $6,000 increase

Reference no: EM132945669

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