$3$

$2$ points

Maria defers $$100$ of gain realized in a section $351$ transaction. The stock she receives in the exchange has a fair market value of $$500.$ Maria's tax basis in the stock will be $$400.$

True

False $$

$2$ points

Which of the following statements regarding a partner's basis adjustments is true?

A partner's basis may never be reduced below zero.

A partner must adjust his basis for ordinary income $($loss$)$ but not for separately$-$stated items.

A partnership fine or penalty does not affect a partner's basis.

Relief of partnership debt increases a partner's tax basis.