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Closing Tax Loopholes: New Rules for Partnership Basis Shifting.

This bill closes specific tax loopholes that allowed related parties operating through partnerships to avoid taxes by manipulating the tax basis of assets. It mandates recognition of gain when property distributions result in a basis increase of other partnership assets. For the public, this means tax strategies involving related parties will be curtailed, and penalties for understatements related to these transactions will be doubled.
Key points
Requires recognition of gain on property distributions between related partners if the transaction results in a basis increase of other partnership assets.
Increases the penalty for tax understatements related to these transactions from 20% to 40%.
The new rules apply to partnerships where partners are related; small businesses meeting specific gross receipts tests are exempt.
article Official text account_balance Process page
Introduced
Citizen Poll
No votes cast
Additional Information
Print number: 119_S_2094
Sponsor: Sen. Wyden, Ron [D-OR]
Process start date: 2025-06-17
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Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Basis Shifting is a Rip-off Act

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_S_2094.

Which chamber initiated this legislation?

This legislation was initiated in the Senate.

When did the legislative process begin?

The process officially started on 2025-06-17.

What are the main provisions?

Key points include:

  • Requires recognition of gain on property distributions between related partners if the transaction results in a basis increase of other partnership assets.
  • Increases the penalty for tax understatements related to these transactions from 20% to 40%.
  • The new rules apply to partnerships where partners are related; small businesses meeting specific gross receipts tests are exempt.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Sen. Wyden, Ron [D-OR].

What is the latest detailed status?

The latest detailed status is: Introduced in Senate

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-31.

CATEGORIES

Taxes