Читать книгу Taxation Essentials of LLCs and Partnerships - Larry Tunnell - Страница 34

Tim is a 20% partner in Sparrowhawk Partners. He contributed $40,000 to the newly-formed partnership in exchange for his interest early this year. The partnership invested all its capital in municipal bonds. For the year, Tim's share of the partnership's municipal bond interest income was $2,000. The partnership had no other items of income or loss. Although this income is not taxable, it increases Tim's share of partnership assets to $42,000. If he were not required to increase his tax basis in the partnership interest by his share of the tax- exempt municipal bond interest, a subsequent sale of that interest for its $42,000 value would trigger a $2,000 taxable gain to Tim. (His initial basis in the partnership interest was $40,000.) The basis adjustment preserves the tax-exempt nature of the income allocated to Tim.

If the partnership reports a loss, rather than a profit, each partner's share of the loss reduces his or her interest in the partnership's remaining partnership assets. Section 705(a)(2) requires that the partner's basis in the partnership interest be reduced by his or her share of each item of partnership loss or expense, including nondeductible losses or expenses. The reason nondeductible expenses reduce the partner's basis in the partnership interest is similar to the reason tax-exempt income increases basis. If a partner's basis was not reduced for nondeductible expenses, the partner would presumably have a greater loss or lower gain on the sale of the partnership, which would be essentially equivalent to making the expenses deductible.