Ted" <Ted[at]ixmil.com> wrote:

- quote -

(b) Adjustment To Basis Of Partnership Property

In the case of a transfer of an interest in a partnership by
sale or exchange or upon the death of a partner, a
partnership with respect to which the election provided in
section 754 is in effect or which has a substantial built-in
loss immediately after such transfer shall--
(1) increase the adjusted basis of the partnership property
by the excess of the basis to the transferee partner of his
interest in the partnership over his proportionate share of
the adjusted basis of the partnership property, or
(2) decrease the adjusted basis of the partnership property
by the excess of the transferee partner's proportionate
share of the adjusted basis of the partnership property over
the basis of his interest in the partnership.
Under regulations prescribed by the Secretary, such increase
or decrease shall constitute an adjustment to the basis of
partnership property with respect to the transferee partner
only. A partner's proportionate share of the adjusted basis
of partnership property shall be determined in accordance
with his interest in partnership capital and, in the case of
property contributed to the partnership by a partner,
section 704(c) (relating to contributed property) shall
apply in determining such share. In the case of an
adjustment under this subsection to the basis of partnership
property subject to depletion, any depletion allowable shall
be determined separately for the transferee partner with
respect to his interest in such property.

--- end of 743(b)

---
Drew Edmundson, CPA
Cary, NC

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I have a K1 from a limited partnership. The whole thing is
a nightmare, but I have worked everything out but this.

The K1 instructions do not mention it, my accountant says to
ignore it, and TaxCut says "A section 743(b) adjustment may
occur when there is a sale or exchange of a partnership
interest or a partner dies. The adjustment increases or
decreases your distributive share of income, deduction,
gain, or loss for a partnership item." This doesn't look
like something that should be ignored.

Anyone know?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >