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

• once the election is made, the basis adjustment applies only to the transactions the partnership chooses.
• the basis adjustment may be positive (increase) or negative (decrease)
• The basis adjustment may not affect all partners of the partnership in the same way.
• The election is made by the partnership.

#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:

• 10,000 increase
• $10,000 decrease
• $6,000 decrease
• $6,000 increase