The IRS has issued final regulations on partnership recourse liability. They address when to disregard certain obligations to restore a deficit balance in a partner’s capital account. They also grapple with how “bottom dollar payment obligations” are treated. The regs adopt the temporary regs with some changes. This includes adding a list of factors to indicate when a plan to circumvent or avoid a deficit restoration obligation (DRO) exists; revising the assumption of liability rules; and changing the definition of a bottom dollar payment obligation to address capital contribution obligations. Contact us to assess what your liability might be under the new regs.