Sec. 3614. Corresponding adjustments to basis of properties held by partnership where partnership basis adjusted

534 words·~2 min read·/bill/113/hr/1/ih/section-3614

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Subpart B of part II of subchapter K of chapter 1, as amended by the preceding provisions of this Act, is amended by inserting after section 735 the following new section: In the case of any distribution of property to a partner by an upper-tier partnership, if such distribution results in an adjustment in the upper-tier partnership’s adjusted basis in an interest in a lower-tier partnership under section 734, then such lower-tier partnership shall make a corresponding adjustment to the adjusted basis of its partnership property.

In the case of any distribution of an interest in a lower-tier partnership by an upper-tier partnership— if the adjusted basis of such interest in the hands of the upper-tier partnership (determined immediately before such distribution) exceeds the adjusted basis of such interest in the hands of the distributee partner (determined immediately after such distribution), then such lower-tier partnership shall decrease the adjusted basis of its partnership property by the amount of such excess, or if the adjusted basis of such interest in the hands of the distributee partner (determined immediately after such distribution) exceeds the adjusted basis of such interest in the hands of the upper-tier partnership (determined immediately before such distribution), then such lower-tier partnership shall increase the adjusted basis of its partnership property by the amount of such excess.

In the case of a disposition of an interest in an upper-tier partnership which holds an interest in a lower-tier partnership, if there is an adjustment to the adjusted basis of the lower-tier partnership under section 743, then such lower-tier partnership shall make a corresponding adjustment to the adjusted basis of its partnership property. In the case of any adjustment under subsection (a), (b), or

(c)in the adjusted basis of an interest in another partnership, such other partnership shall make a corresponding adjustment in the adjusted basis of its partnership property. In the case of any adjustment in the adjusted basis of partnership property— under subsection (a), (b), (c), or (d), such adjustment shall be made only with respect to the upper-tier partnership’s proportionate share (as determined under section 743(a)) of the adjusted basis of the lower-tier partnership’s property, under subsection

(a)or

(b)(or so much of subsection

(d)as relates to either such subsection), rules similar to the rules of section 734(d) shall apply, and under subsection

(c)(or so much of subsection

(d)as relates to such subsection), rules similar to the rules of section 743(b) shall apply. In the case of any adjustment in the adjusted basis of partnership property by a lower-tier partnership under this section by reason of a distribution by, or a disposition of an interest in, an upper-tier partnership, such upper-tier partnership shall furnish (in such manner as the Secretary shall prescribe) to such lower-tier partnership such information as is necessary to enable such lower-tier partnership to make such adjustment. For purposes of this section— The term upper-tier partnership means a partnership owning an interest in another partnership. The term lower-tier partnership means the partnership referred to in paragraph

(1)an interest in which is owned by the upper-tier partnership. . The amendments made by this section shall apply to distributions and transfers after December 31, 2014.