- 17 - that such a factual determination was not required. We disagree. As to DII’s sale of the stock distributed by DIP, respondent determined in the FPAA only the partnership item components of any resulting assessment; respondent was required to make further partner-level factual determinations as to any such assessment. The claimed long-term capital loss reportedly passed from DII to petitioner and resulted from DII’s sale of INVI stock. Respondent needed to determine, among other things, whether the stock that was the subject of the sale was the same stock distributed by DIP, the portion of the stock actually sold, the holding period for the stock, and the character of any gain or loss. The fact that these partner-level determinations, once made, may not have changed respondent’s partnership determinations as to DIP is of no concern. Neither the Code nor the regulations thereunder require that partner-level determinations actually result in a substantive change to a determination made at the partnership level. Nor did the FPAA definitively determine the outside basis of any DIP partner. Thus, when a partner-level determination is required to determine a partner’s basis, the deficiency procedures apply although the determination may or may not actually alter the final result.13 See Dial USA v. Commissioner, 13 We note, however, that respondent in the FPAA made several partnership-item determinations that the partners were (continued...)Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: November 10, 2007