The Internal Revenue Service has targeted complex partnerships it believes are not in compliance with the tax law for audit. One of the abuses the IRS has attacked is transfers of interests in partnerships which result in an increase in the basis of a partner who is subject to a high marginal income tax rate. This perceived abuse results in lower income tax and/or a higher basis in partnership property for the higher marginal income tax partner. The final regulations characterized certain partnership-related basis adjustments as transactions of interest. In a practical sense, this means that property transfers in a partnership with related party partners may run the risk of IRS scrutiny if audited. It is common for certain types of partnerships, such as real estate limited partnerships, to have related partner partnership allocations. However, President Trump’s Executive Order 14219 withdrew the final regulations. The IRS may decide to scrutinize partnerships with related party transfers even though these regulations have been withdrawn. Even though they will be removed, these regulations reveal a great deal regarding how partnerships can make non-pro-rata allocations to partners that will pass IRS scrutiny and when the IRS might find them objectionable. This program and partnership allocations generally involve an understanding of the rules for partnership distributions and Section 754 elections. The program begins with coverage of those two topics, with time devoted to adjustments under both Section 743(b) and Section 734(b).