The IRS has issued final regulations that identify certain partnership related-party basis-shifting transactions and substantially similar transactions as transactions of interest (TOIs), which subjects them to the rules for reportable transactions.
The final regulations apply to related partners and partnerships that participated in the identified transactions through distributions of partnership property or the transfer of an interest in the partnership by a related partner to a related transferee.
The affected taxpayers and their material advisers are subject to the disclosure requirements for reportable transactions.
The final regulations make several important changes to the proposed regulations (REG-124593-23) that the IRS issued in June 2024, including an increased dollar threshold for basis increase in a TOI.