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Money Distributed to Partners (Basis & Equity)

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Concerning money (or property) distributed to Partners:

The partner’s basis is decreased (but never below zero) by the following items:

  • The money and adjusted basis of property distributed to the partner by the partnership.
  • The partner’s distributive share of the partnership losses (including capital losses).
  • The partner’s distributive share of nondeductible partnership expenses that are not capital expenditures. This includes the partner’s share of any section 179 expenses, even if the partner cannot deduct the entire amount on his or her individual income tax return.
  • The partner’s deduction for depletion for any partnership oil and gas wells, up to the proportionate share of the adjusted basis of the wells allocated to the partner.
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