Monte A. Jackel, Lecturer/Principal, Jackel Tax Law, was quoted in Tax Notes, a weekly publication of Tax Analysts, Fairfax, VA. The article looks at the IRS announcement that they would issue unspecified guidance on inappropriate basis shifting among related parties in a partnership.

Tax Notes
Date: November 11, 2022
By: Kristen A. Parillo
New Guidance Project on Basis Adjustments Spurs Speculation

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According to Monte A. Jackel of Jackel Tax Law, the government is likely focusing both on basis shifting caused by “basis strips” among related-party partners and on the creation of section 743(b) basis adjustments caused by the intentional creation of reverse section 704(c) gain among related-party partners.

The reverse gain is created by partially redeeming a partner and transferring the remaining portion of the partnership interest in a nonrecognition transaction, Jackel said. The related parties may be members of a consolidated group or may otherwise be related within the meaning of sections 267, 318, and 482, he added.

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