1. Pedro is a calendar-year taxpayer who owns a 25% capital and profits interest in the SPTD Partnership. Tamara sells the remaining 75% capital and profits interest to Sam on September 30. The partnership year-end is April 30 as permitted by the IRS for business purpose reasons. The SPTD Partnership

A) terminates on September 30.

B) terminates on October 31.

C) terminates on December 31.

D) does not terminate.

2. Which of the following is a valid reason for making a 754 election?

A) An incoming partner pays more for a partnership interest that his or her proportionate share of partnership assets.

B) Partners are able to increase their basis in the partnership interest upon the sale of a partnership interest.

C) Partnerships can increase, but not decrease, their basis in partnership assets.

D) A partnership can reduce its basis in assets upon cash distributions to partners.