On June 17, 2024, Treasury issued a suite of guidance documents
(a revenue ruling, proposed regulations, and a notice of an intent
to issue further proposed regulations) on so-called partnership
related-party basis-adjustment transactions. In a related
announcement, the IRS states: "Treasury estimates these
abusive transactions, which cut across a wide variety of industries
and individuals, could potentially cost taxpayers more than $50
billion over a 10-year period."1
Such transactions generally involve a tax partnership, related
partners (or their equivalent via a tax-indifferent partner), a
significant inside-outside basis disparity regarding such
partnership, and a nonrecognition transaction (generally a
distribution of property or a transfer of an interest in such
partnership) that triggers a so-called "shift" of basis
from non-amortizable/non-depreciable assets to
amortizable/depreciable assets (or to assets that will be
subsequently sold in the near term).
