Taxpayer gives a partnership interest with suspended passive activity loss to spouse on 10/1/18. See special basis rule in 469(j)(6) for unused loss. Do you measure that basis adjustment at 10/1; or 1/1; or 12/31? See definition of passive activity loss in 469(d)(1).
Second, if taxpayer dies later in 2018, he should be able to use his suspended losses in final 1040. See 469(g)(2). Did he give away the suspended loss attribute or since he used the attribute as of yearend, there is no attribute allocable to gifted partnership interest?
And where if at all does the sec 2035 3-year rule come in?