9. Which, if either, of the following statements is or are false?

Tax exempt income received by a partnership, for example, municipal bond interest, does not increase a partners basis in his/her partnership interest because the income is not taxable.

A partner who receives a current property distribution (other than cash), made pro rata to all the partners, will not have to report a gain with respect to the distribution.

a. I only

b. II only

c. Both I and II

d. Neither I nor II