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partner, without the superfluous step of conducting a partnership
proceeding”. Id. at 557.
A partner’s basis in his partnership interest is an affected
item. Sec. 301.6231(a)(5)-1T(b), Temporary Proced. & Admin.
Regs., 52 Fed. Reg. 6790 (Mar. 5, 1987). Our normal deficiency
procedures apply to “any deficiency attributable to * * *
affected items which require partner level determinations”. Sec.
6230(a)(2)(A)(i). Since a partner’s basis in a partnership
interest may require determinations at the partner level,
deficiencies attributable to adjustments to basis must be made at
the partner level. See Dial USA, Inc. v. Commissioner, 95 T.C.
1, 5-6 (1990).
In the notice of deficiency, respondent determined: “Since
your distributive share of the partnership loss is limited to the
extent of your adjusted basis, we have disallowed the amount in
excess of your basis [$36,000], as shown.” Respondent’s
determination is based on an adjustment to Mr. Gustin’s basis in
his partnership interest, an affected item. Mr. Gustin’s
partnership loss is affected by partnership items; however, basis
is not itself a partnership item and can be the appropriate
subject of deficiency proceedings.
In this case, respondent acknowledges that he cannot make an
adjustment to a partnership item, and he accepts the partnership
return as filed. The treatment of partnership items on Annona’s
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