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Basis change with 734 adj??

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    #1

    Basis change with 734 adj??

    A partnership was formed in 1962, and after lo these many years, beneficiaries are now the partners (11 of them). When the last of original partners died, the partnership revalued everything at stepped-up values.

    Question: Do the 11 partners get a positive uptick to their basis as a result of the revaluation? The revaluation is not really "income", certainly not taxable income or tax exempt income either.

    If one of the remaining 11 partners sell, and cannot increase his(her) basis, there will be a capital gain out of proportion to reality.

    Comments are invited. Thanks..
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    #2
    Does the term "outside basis " and "inside basis" mean anything to you?
    This post is for discussion purposes only and should be verified with other sources before actual use.

    Many times I post additional info on the post, Click on "message board" for updated content.

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      #3
      Bob, I would say the question is directed to "outside basis". There is also partners' capital account, which, given time, will almost never be the same as partners' basis.

      I have seen a number of worksheets supporting partners' basis, but none of them address the stepped up effect.

      Thanks for your response...

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