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Section 301.6231(a)(3)-1(c), Proced. & Admin. Regs., which
provides illustrations of section 301.6231(a)(3)-1(a)(4), Proced.
& Admin. Regs., states in pertinent part:
(c) Illustrations.--(1) In general.-- This para-
graph (c) illustrates the provisions of paragraph
(a)(4) of this section [301.6231(a)(3)-1]. The deter-
minations illustrated in this paragraph (c) that the
partnership is required to make are not exhaustive;
there may be additional determinations that the part-
nership is required to make which relate to a transac-
tion listed in paragraph (a)(4) of this section. The
critical element is that the partnership needs to make
a determination with respect to a matter for the pur-
poses stated; failure by the partnership actually to
make a determination (for example, because it does not
maintain proper books and records) does not prevent an
item from being a partnership item.
(2) Contributions.-– For purposes of its books and
records, or for purposes of furnishing information to a
partner, the partnership needs to determine:
(i) The character of the amount re-
ceived from a partner (for example, whether
it is a contribution, a loan, or a repayment
of a loan);
* * * * * * *
(iv) The basis to the partnership of
contributed property (including necessary
preliminary determinations, such as the part-
ner’s basis in the contributed property).
To the extent that a determination of an item relating
to a contribution can be made from these and similar
determinations that the partnership is required to
make, therefore, that item is a partnership item. To
the extent that the determination requires other infor-
mation, however, that item is not a partnership item.
For example, it may be necessary to determine whether
contribution of the property causes recapture by the
contributing partner of the investment credit under
section 47 in certain circumstances in which that
determination is irrelevant to the partnership.
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Last modified: November 10, 2007