What does outside basis mean on the CPA exam?
Outside basis. A partner's tax basis in the partnership interest itself. It includes their share of partnership debt, which inside basis does not.
Defined against Sec. 722.
Which CPA exam sections use outside basis?
Outside basis appears in 6 CPA exam sections: AUD, BAR, FAR, ISC, REG, TCP.
Related terms
- inside basis: The partnership's own tax basis in the assets it holds.
- partnership interest: A partner's stake in the partnership itself, distinct from any interest in its underlying assets.
- tax basis: What an asset or liability is worth for tax purposes, which is often not what it is worth for accounting.
- partnership liabilities: Debt of the partnership, allocated among the partners and added to their outside basis.
- carryover basis: Basis that follows the property from the previous owner instead of resetting to what was paid.
- debt basis: An S corporation shareholder's basis in loans they personally made to the corporation.