$.$ These include transactions with partners such as an increase for additional $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ to the partnership and a $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ for distributions to partners.$$ However, the basis must also be increased and decreased for separate items of income and deductions reported by the partnership and included on Form $1040$ by the partner. This $($does$,$ does not$)$ include tax$-$exempt income and non$-$deductible items.$$ If partners do not increase their basis for taxable and tax$-$exempt income they have reported on their tax return and on which they paid tax over the years, they will, in effect, pay tax on this income again when they sell their partnership interest at a gain.$$ The basis is also increased$/$decreased by increases and decreases in the partner$$s share of $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.$