Alabama Administrative Code
Title 810 - ALABAMA DEPARTMENT OF REVENUE
Chapter 810-3-24 - TAXATION OF PARTNERSHIPS
Section 810-3-24-.05 - Partner's Basis In Partnership Interest
Universal Citation: AL Admin Code R 810-3-24-.05
Current through Register Vol. 42, No. 11, August 30, 2024
(1) A partnership interest is personal property hold for the production of income. A gain or loss from the sale or other disposition of a partnership interest must be recognized to the extent provided in § 40-18-8.
(2) The adjusted basis of a partner's interest in a partnership shall be the amount of property, including money, contributed to the partnership:
(a) increased
by the sum of his distributive share (not including any "Guaranteed Payments to
Partners") for the taxable year and prior taxable years of:
1. the taxable income of the
partnership,
2. the income of the
partnership exempt from tax, and
3.
the excess of the deductions for depletion over the basis of the property
subject to depletion,
(b) decreased (but not below zero) by
distributions by the partnership and the sum of his distributive share for the
taxable year and prior taxable years of -
1.
losses of the partnership, and
2.
expenditures of the partnership not deductible in computing its taxable income
and not property chargeable to the capital account.
(3)
(a) Any increase in a partner's share of the
liabilities of a partnership, or any increase in a partner's individual
liabilities by reason of the assumption by such partner of partnership
liabilities shall be considered as a contribution of money by such partner to
the partnership.
(b) Any decrease
in a partner's share of the liabilities of a partnership, or any decrease in a
partner's individual liabilities by reason of the assumption by the partnership
of such individual liabilities, shall be considered as a distribution of money
to the partner by the partnership.
(4)
(a) If
a partner makes a contribution of property subject to a liability to a
partnership, and the partnership assumes the liability, the amount of the
liability (not exceeding the fair market value of the property at the time of
the contribution) will be considered a contribution to the partnership in the
amount of the liability that is not allocated to the other members of the
partnership.
(b) If property
subject to an indebtedness is distributed by a partnership to a partner, and
the liability is assumed by the distributee, the amount of the liability, (not
exceeding the fair market value of the property at the time of the
distribution) will be considered to be a contribution to the partnership in the
amount of the liability that had been allocated to the other members of the
partnership.
Authors: Ecta Spicer, Roy Wiggins, and John H. Burgess.
Statutroy Authority: Code of Ala. 1975, § 40-18-24.
Disclaimer: These regulations may not be the most recent version. Alabama may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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