The basis of a partner's interest in a partnership is adjusted to reflect each partner's share of income and deduction items only if a distribution is made to the partners.

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The basis of a partner's interest in a partnership is adjusted to reflect each partner's share of income and deduction items even if no distribution is made to the partners. This is known as the partner's "outside basis." However, the partner's "inside basis" (which reflects the partnership's basis in its assets) is only adjusted if a distribution is made to the partners.

The Basis of a Partner's Interest in a Partnership Is