On June 17, 2024, the Internal Revenue Service (the “IRS”) and the Treasury Department released a series of guidance regarding so-called “basis shifting” transactions among related partners of a partnership. The guidance focuses on three circumstances involving transactions between related parties that the agencies believe give rise to abuse, including current partnership distributions resulting in basis increase in the partnership’s remaining assets, liquidating partnership distributions resulting in basis increase in distributed assets, and transfers of partnership interests resulting in step-up in the “inside basis” of partnership assets.