CCA 200911017: Final TEFRA adjustments are taken into account at the electing large partnership level

Plain-English summary

Section 6240(b)(2) requires TEFRA partnership items to be taken into account at the electing large partnership level under section 6242. Once the TEFRA items are finally determined, the electing large partnership includes them on its return for the later year when the adjustments take effect. The adjustments then appear on the Schedules K-1 issued by that partnership. Alternatively, the electing large partnership may pay the tax itself.

Ruling snapshot

• Question: How does an electing large partnership account for finally determined TEFRA partnership items?
• Outcome: Advice given: include the adjustments on the later-year return and K-1s, or have the partnership pay the tax.
• Key authorities: IRC §§ 6240(b)(2) and 6242.

Full text (IRS public release)

ID: CCA_2009020208575037 Number: 200911017
Release Date: 3/13/2009
Office: --------------
UILC: 6240.00-00

From: -------------------
Sent: Monday, February 02, 2009 8:57:52 AM
To: --------------------
Cc: ------------------------------------------------------------------------------ Subject: RE: ELP Tier

Section 6240(b)(2) allows us to take the TEFRA partnership items into account only at the electing large partnership level under section 6242. In other words, when the TEFRA partnership items are finally determined, they are included in the electing large partnership's return for the later year when the adjustments finally take effect. They are then included in the Schedules K-1 issued by the electing large partnership. Or the ELP may, instead, just pay the tax.