Basis-Shifting Transaction-of-Interest Regulations To Be Removed
The U.S. Department of the Treasury and the IRS recently announced the intent to remove basis-shifting transaction-of-interest (TOI) regulations.
Published in Notice 2025-23, the announcement states that the Treasury and the IRS intend to publish a notice of proposed rulemaking to remove Regs. Sec. 1.6011-18 from the income tax regulations. Regs. Sec. 1.6011-18 were issued in January and identified several types of partnership related-party basis-adjustment transactions as TOIs.
The notice also withdraws Notice 2024-54, which describes certain proposed regulations that the Treasury and the IRS intended to issue addressing partnership related-party basis-shifting transactions.
Lastly, the notice provides immediate relief from penalties under Secs. 6707A(a), 6707(a) and 6708 for any failure by participants or material advisers to file disclosure statements or maintain lists required by the regulations.