Section 722 Flashcards
1
Q
What is “outside basis”?
A
A partner’s basis in the partnership interest received. The outside basis is equal to the sum of the adjusted basis of any property contributed plus any cash contributed.
2
Q
What is “inside basis”?
A
The partnership’s basis in the contributed property
3
Q
What does it mean when a partner is permitted to “tack” the holding period in a contributed property?
A
A partner merely changes the form of her investment in the contributed property so she is permitted to tack the holding period she had in that property to the holding period of her partnership interest.
Money, inventory and services don’t have holding periods so the partner’s holding period begins the day following formation of the partnership (Section 1223(1)).
