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What occurs if a partner's basis becomes negative due to their allocated share of a...

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Accounting

What occurs if a partner's basis becomes negative due to their allocated share of a decrease in partnership debt?
A) The partner will treat the reduction in excess of her basis as ordinary income.
B) The partner will treat the reduction in excess of her basis as capital gain.
C) The partner will not ever be taxed on the reduction in excess of her basis.
D) The partner will not be taxed on the reduction in excess of her basis until she sells her partnership interest.

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