Ezel / IRS Rulings / 1044013
Chief Counsel Advice 1044013 Released November 5, 2010 Advice

CCA 1044013: Reducing partnership liabilities can create a deemed cash distribution

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This page covers one taxpayer's ruling from 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2010
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel Advice states that reducing a partner's reported partnership liability under IRC § 752(b) results in a deemed cash distribution to the partners whose liabilities are reduced. The advice notes that the issue requires confirmation from the relevant parties.

Ruling snapshot

  • Question: What is the tax effect of reducing a partner's reported partnership liability?
  • Outcome: Advice given
  • Key authorities: IRC § 752(b)

Full text (IRS public release)

ID: CCA_2010101814121537 Number: 201044013
Release Date: 11/5/2010
Office: ----------
UILC: 752.02-00

From: -------------------
Sent: Monday, October 18, 2010 2:12:17 PM
To: --------------------
Cc: ---------------------------------
Subject: RE: New TEFRA case

I agree that adjusting the reported partnership liability of Partnership B downward results in a deemed
distribution of cash to the partners whose liabilities are decreased under section 752(b). This is -------
issue, however, so you will need their confirmation.

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