Does adjusting a partner's basis for tax-exempt income prevent double taxation?

1. No, making this adjustment to the partner's basis prevents the tax-exempt income from being converted to taxable income
2. No, the partner should not adjust his tax basis by his share of tax-exempt income
3. Yes, if this basis adjustment is not made the partner will be taxed once when the income is allocated to him and a second time when he sells his partnership interest
4. Yes, if this basis adjustment is not made the partner will be taxed on the tax-exempt income twice when he sells his partnership interest because he was not taxed on this income when it was earned