Section 1.742-1 - Basis of transferee partner's interest(a)In general. The basis to a transferee partner of an interest in a partnership shall be determined under the general basis rules for property provided by part II (section 1011 and following), Subchapter O, Chapter 1 of the Internal Revenue Code. Thus, the basis of a purchased interest will be its cost. Generally, the basis of a partnership interest acquired from a decedent is the fair market value of the interest at the date of his death or at the alternate valuation date, increased by his estate's or other successor's share of partnership liabilities, if any, on that date, and reduced to the extent that such value is attributable to items constituting income in respect of a decedent (see section 753 and §§ 1.706-1(c)(3)(v) and 1.753-1(b) ) under section 691. See section 1014(c). However, the basis of a partnership interest acquired from a decedent is determined under section 1022 if the decedent died in 2010 and the decedent's executor elected to have section 1022 apply to the decedent's estate. For basis of contributing partner's interest, see section 722. The basis so determined is then subject to the adjustments provided in section 705.(b)Effective/applicability date. This section applies on and after January 19, 2017. For rules before January 19, 2017, see § 1.742-1 as contained in 26 CFR part 1 revised as of April 1, 2016.T.D. 9811, 82 FR 6239, Jan. 19, 2017 T.D. 9811, 82 FR 6239, 1/19/2017