Читать книгу Taxation Essentials of LLCs and Partnerships - Larry Tunnell - Страница 25

Arthur contributed property with a tax basis of $100,000 and a fair market value of $500,000 to the newly formed AY Partnership this year in exchange for a 50% interest therein. For its first year, the partnership reported taxable income of $600,000, of which Arthur's share was $300,000. The partnership distributed half its income to the partners and reinvested the other half in its operations. Therefore, Arthur received a distribution of $150,000. Absent an adjustment to his basis in his partnership interest to reflect his $300,000 share of the partnership's income, the distribution to Arthur of $150,000 of his share of partnership profits would trigger recognition of a $50,000 taxable gain. (His initial tax basis in the partnership interest was only $100,000, which would not be sufficient to absorb a $150,000 distribution).

However, because Arthur's tax basis in his partnership interest is increased by his $300,000 share of partnership income (to $400,000), the $150,000 distribution will be tax-free. His remaining tax basis in the partnership interest will be $250,000 ($400,000 - $150,000). Looked at another way, his basis in the partnership interest was increased by the $150,000 share of partnership profits which he did not withdraw from the partnership. By not withdrawing this portion of his share of profits, he essentially contributed those profits back to the partnership. His basis in the partnership interest is increased accordingly.

Note that one result of the preceding framework is that the partners' aggregate bases in their partnership interests (outside basis) generally equal the partnership's aggregate bases in its assets (inside basis). This equality is important because it prevents taxpayers from using partnerships to manipulate the tax consequences associated with the sale or other disposition of property. Because the partners' outside bases in their partnership interests generally equal the partnership's aggregate inside basis in its assets, the same amount of gain or loss is recognized when a partner sells his or her interest in a partnership as would have been recognized if he or she had sold the asset(s) contributed to the partnership in exchange for that interest. Likewise, the partnership will recognize the same amount of gain or loss from the sale of its assets as the partners who contributed those assets would have recognized had they sold them directly, rather than through the partnership.