Ezel / IRS Rulings / 201617008

FPAA may determine components of outside basis but not basis itself

Number
201617008
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Partnership Item; Nonpartnership Item
Topics
Procedure, penalties, and administration
Code sections
§ 754, § 6231
Ruling dated
April 1, 2016
Publicly released
April 22, 2016
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 2016, 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 2016
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

The IRS considered what a final partnership administrative adjustment could determine about a partner's outside basis. It advised that, absent a section 754 election, outside basis itself is not a partnership item and cannot be determined in the partnership-level notice. The notice may still determine partnership-level components used to calculate that basis, such as contributions and distributions.

Ruling snapshot

  • Question: May an FPAA determine a partner's outside basis or the partnership-level components of that basis?
  • Outcome: Advice given
  • Key authorities: IRC §§ 754, 6231

Full text (IRS public release)

ID:           CCA_2016040111303007
UILC:         6231.03-00, 6231.04-00

Number: 201617008
Release Date: 4/22/2016
From:
Sent: Friday, April 01, 2016 11:30:31 AM
To:
Cc:
Bcc:
Subject: RE: FPAA for Review - statute 6/30/2014


Hi -------,

We cannot determine a partner’s outside basis in an FPAA (absent a section 754 election) because it is
not a partnership item. But, we can determine the partnership-level components of it (i.e. contributions,
distributions, etc.) in the FPAA.


Thanks,
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