Start Disproportionate liquidating distributions

Disproportionate liquidating distributions

A partner’s initial basis in his partnership interest depends on how the partner acquired the interest.

These statutory adjustments include deductions that reduce taxable income but do not reduce the corporation's ability to pay dividends or vice versa.

For example, the dividends-received deduction is deductible for income tax purposes but not for the computation of E&P, since it does not reduce the amount of money available to pay dividends.

The partner’s basis in his partnership interest in increased by: These basis adjustments depend in large part on the allocation of partnership income, gains, losses, deductions, and credit among the partners.