IRS Issues Final Regulations On Allocations Of Partnership Items

On July 31, 2015, the IRS issued final regulations (T.D. 9728) on the allocation of partnership items when a partner's interest varies during the partnership's tax year. The 19-page set of final regulations adopt proposed regulations from 2009, with certain changes, and generally apply to tax years beginning on or after August 3, 2015. The rules apply in any year in which there is a change in a partner's interest in the partnership, either because the partner disposed of all or part of its interest, or because the partner's interest in the partnership was reduced as a result of the entry of a new partner or partners.

The final regulations reorganize section 1.706-4 of the regulations, including provisions and rules concerning: