Ezel / IRS Rulings / 201125032

CCA 201125032: Loans and discharge of indebtedness were partnership items

Number
201125032
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Partnership Item
Topics
Procedure, penalties, and administration
Code sections
§ 6231
Ruling dated
May 26, 2011
Publicly released
June 24, 2011
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2011, 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 2011
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 is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, 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 addressed a TEFRA question involving loans made to a partnership. The advice concluded that the loans were partnership items. It also treated the discharge of the loans, the resulting cancellation-of-debt income allocated to the partnership and partners, and the partner's loss for unrecovered outside basis upon dissolution as partnership or affected items. The advice further stated that the characterization did not matter for closing-agreement purposes.

Ruling snapshot

  • Question: How should partnership loans, their discharge, resulting cancellation-of-debt income, and related partner losses be characterized?
  • Outcome: Advice given.
  • Key authorities: IRC § 6231.

Full text (IRS public release)

ID: CCA_2011052612334237 Number: 201125032
Release Date: 6/24/2011
Office: ---------
UILC: 6231.03-00

From: --------------------
Sent: Thursday, May 26, 2011 12:33:47 PM
To: ------------------
Cc: ------------
Subject: RE: TEFRA Question

Loans to the partnership are partnership items. The discharge of the loans and the resulting COD income to the partnership and partners is also a partnership item. The partner's loss for the unrecovered outside basis upon dissolution of the partnership is an affected item as is any bad debt deduction incurred by the partner.

For closing agreement purposes the characterization is irrelevant.

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