The IRS and Treasury published Notice 2015-54 on August 6, 2015 modifying the rules applicable to the contribution of built-in gain property to a partnership.
Under the Notice, a U.S. transferor is required to recognize any built-in gain on the transfer of property to the partnership, irrespective of section 721(a), unless certain conditions are satisfied like gain deferral method, or GDM, including that the partnership adopt the remedial allocation method with respect to the built-in gain property, and that the partnership allocate any section 704(b) book items attributable to the contributed property proportionately between and among its partners. The Notice 2015-54 imposes three conditions to meet to be applicable.
