Sec. 3612. Mandatory adjustments to basis of partnership property in case of transfer of partnership interests
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/bill/113/hr/1/ih/section-3612A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 743 is amended— by striking subsections (a), (c), (d), (e), and
(f)and by redesignating subsection
(b)as subsection (a), in subsection
(a)(as so redesignated) by striking 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 , and by adding at the end the following new subsection: Any increase or decrease in the adjusted basis of partnership property under subsection
(a)shall, except as provided in paragraph (2), be allocated— in a manner which has the effect of reducing the difference between the fair market value and the adjusted basis of partnership properties, or in any other manner permitted by regulations prescribed by the Secretary. In applying the allocation rules provided in paragraph (1), increases or decreases in the adjusted basis of partnership property arising from a transfer of an interest attributable to property consisting of— capital assets and property described in section 1231(b), or any other property of the partnership, shall be allocated to partnership property of a like character except that the basis of any such partnership property shall not be reduced below zero. . Section 704(c)(1) is amended— by adding and at the end of subparagraph (A), by striking , and at the end of subparagraph
(B)and inserting a period, and by striking all that follows subparagraph (B). Section 732 is amended by striking subsection
(d)and by redesignating subsections
(e)and
(f)as subsections
(d)and (e), respectively. Section 761(e)(2) is amended by striking optional . Section 6031 is amended by striking subsection (f). The heading for section 743 is amended to read as follows: Adjustment to basis of partnership property. The heading for subsection
(a)(as redesignated by the preceding provisions of this Act) of section 743 is amended by striking and inserting Adjustment to basis of partnership property . In general The amendments made by this section shall apply to transfers after December 31, 2014.