The U.S. Department of the Treasury and IRS on June 17, 2024, released three guidance packages related to certain “basis-shifting” transactions involving partnerships and related parties (and certain tax-indifferent parties) that the government perceives as abusive.
- Notice 2024-54 announces the Treasury and the IRS’s intent to publish two sets of forthcoming proposed regulations related to certain partnership related-party basis adjustment transactions (covered transactions).
- In addition, Treasury and the IRS released proposed regulations identifying those covered transactions and substantially similar transactions as transactions of interest (TOI).
- Finally, Treasury and the IRS released Rev. Rul. 2024-14 clarifying when the economic substance doctrine (ESD) may apply to disallow tax benefits associated with covered transactions.
Read a June 2024 report prepared by KPMG LLP that provides initial analysis and observations on the notice, proposed regulations, and revenue ruling.