Adjustments to a partner's outside basis are made annually to prevent double taxation on the sale of a partnership interest or at the time of a partnership distribution.

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Adjustments to a partner's outside basis are made annually to prevent double taxation on the sale of a partnership interest or at the time of a partnership distribution. This is necessary to ensure that the partner's taxable income from the partnership is not subject to double taxation at the time of the sale or distribution.

Adjustments to a Partner's Outside Basis Are Made Annually to Prevent