IRS Issues New Rules on Basis Allocation Rules for Partnerships

The Internal Revenue Service (IRS) has issued a notice of proposed rulemaking and notice of public hearing related to the Disallowance of Partnership Loss Transfers, Mandatory Basis Adjustments, Basis Reduction in Stock of a Corporate Partner, Modification of Basis Allocation Rules for Substituted Basis Transactions, and Miscellaneous Provisions of existing laws. 

The proposed regulations provide guidance on certain provisions of the American Jobs Creation Act of 2004 and conform the regulations to statutory changes in the Taxpayer Relief Act of 1997. The proposed regulations also modify the basis allocation rules to prevent certain unintended consequences of the current basis allocation rules for substituted basis transactions. 

Finally, the proposed regulations provide additional guidance on allocations resulting from revaluations of partnership property. The proposed regulations affect partnerships and their partners. This document also contains a notice of a public hearing on these proposed regulations.

 [REG-144468-05]

Source:  Internal Revenue Service at https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-00649.pdf