New proposed regulations regarding fragmentaion of partnership interest basis

Article Abstract:

The author discusses IRS proposed regulations under IRC section 1223 which provide guidance concerning the division of partnership interests' holding periods. The author states that revision of the regulations are necessary due to some problematic provisions.

Tax accounting

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Proposed regulations regarding basis adjustments following transfer of a partnership interest

Article Abstract:

IRS proposed regulations under IRC partnership sections 734, 743, and 755 contain complicated guidance for particular situations of bases adjustments after transfers of partnership interests. Regulation examples include allocation rules for the situation were interests are purchased at values less than the underlying assets. Basis recovery using depreciation deductions is also addressed.

Partnership Interests, Basis (Taxation), Interest (Law)

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Treatment of partnership debt in certain nontaxable property exchanges

Article Abstract:

Partnership property encumbered with IRC section 752(b) debt which is disposed of in section 1033(g) involuntary conversions could result in gain recognition to the individual partners. Constructive partnership distribution treatment pursuant to section 752(b) is the reason for this result. The same result may not occur in all situations in section 1031 like-kind exchanges, if netting of liabilities is allowable. IRS guidance is necessary for clarity in this area.

Liabilities (Accounting), Like-kind exchanges, Recognition of gain or loss (Taxation), Recognized gain or loss (Taxation), Involuntary conversion

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