A partner's stock basis is adjusted by which of the following types of items?

The adjustment of a partner's stock basis in a partnership is influenced by several financial activities within the partnership, particularly income and losses. A partner's basis is adjusted to reflect their share of the partnership’s operating results, which include both nonseparately computed and separately stated items.

Nonseparately computed income refers to the total income from the operation of the partnership that is not itemized separately on the partnership's tax return. This can include ordinary income from business activities. Separately stated items are those that the partnership must report individually to the partners, such as capital gains, charitable contributions, and certain deductions. These items impact a partner’s basis as they represent specific transactions that may have implications for tax liability or benefits.

By adjusting for both types of income, the partnership ensures that each partner’s stock basis accurately reflects their investment in the partnership and their proportionate share of income and losses. This is critical for determining gain or loss upon the sale of partnership interest or distributions from the partnership.

In contrast, other options are limited in scope. Guaranteed payments only adjust basis in specific instances and do not encompass the complete range of income and losses affecting a partner’s basis. Nonseparately stated items alone do not provide a full picture of the