McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 77

Carmine was allocated the following items from the Piccolo LLC for last year:
Ordinary business loss
Nondeductible penalties
Tax-exempt interest income
Short-term capital gain
Cash distributions
Rank these items in terms of the order they should be applied to adjust Carmine's tax basis in Piccolo for the year.