IRS plans to shut tax loophole for the ultrawealthy, raise more than $50 billion – ICIJ

“The proposed new regulations will specifically target large partnerships, the fastest-growing type of business entity in the U.S., which can invest in one another and link within labyrinthine, interconnected structures. The audit rate for large partnerships has hovered near zero percent in recent years.

“The IRS has specifically flagged a tax strategy known as basis shifting, where assets are moved from one entity to another within a partnership. Taxes on assets sold by a partnership are determined after subtracting the asset’s original cost, or basis, from the proceeds. Basis shifting allows for assets to be depreciated, sometimes more than once, by moving them around within the partnership structure — minimizing tax liability, often to zero.”

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