IRS Practice Unit: Nonrecourse, Recourse Liabilities in Partnership Basis Determinations (IRC §752)

Definition of liabilities for federal income tax purposes in the context of partnerships, the IRS Large Business and International Concept Unit outlined in a practice unit released December 18. Both recourse and nonrecourse liabilities are discussed, the IRS noted. After determining that a partnership’s obligation is a tax code Section 752 liability, the next step is to determine if the liability is recourse or nonrecourse. Partnership liabilities impact a partner’s outside basis, the IRS noted. [IRS Practice Unit Recourse vs. Nonrecourse Liabilities (last update Sept. 29, 2020)]

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