Outside Basis Can Be Adjusted Without TEFRA Proceeding

UILC: 6231.03-00, 6231.05-00
Release Date: 5/15/2020

ID: CCA_2019110508450043

From: * * *
Sent: Tuesday, November 05, 2019 8:45:00 AM
To: * * *
Cc: * * *
Bcc:
Subject: RE: * * * — Review of Basis Computation — Captial Contribution Question

Good morning,

Sorry, I am just now getting to this. I was out of the office last week and I spent most of yesterday catching up. The partner's outside basis in his/her partnership interest is an affected item. You may adjust an affected item at the partner level without opening a partnership-level examination if you accept the partnership return as filed. See Meruelo v. Comm'r, 691 F.3d 1108 (9^th Cir. 2012); Roberts v. Comm'r, 94 T.C. 853 (1990). In adjusting outside basis at the partner level in this manner, you cannot change any of the partnership-item components of outside basis without opening a TEFRA proceeding. You can adjust the overall computation of outside basis (again, accepting all the partnership item components as filed on the partnership return) and any non-partnership-item components of outside basis. Please let me know if you have any questions.

Thanks,

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