Proposed Rules Address Allocation of Partnership Recourse Liabilities

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Newly proposed rules from the Internal Revenue Service on partnership recourse liabilities under tax code Section 752 adopt formerly temporary regulations on how to calculate overlapping economic risk of loss.
“The IRS and the Treasury Department are aware that there is uncertainty as to how partners should share a partnership liability if multiple partners bear the economic risk of loss with respect to the same liability,” the agency said in REG-136984-12, issued Dec. 13.
The agency has proposed to adopt the rule from temporary regulations issued in 1988 under Treasury Regulations Section 1.752-1T(d)(3)(i), which preceded the existing final regulations under Section 752, it said.
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