In determining the tax base of a partner, income, deductions, losses, and debt derived or accrued against the partnership retain their status as to the income's geographic source and type, as well as the gains, deductions, losses, and debt.

A partner's share in a partnership's income, loss, expenses, and debt shall be taken into account for the purpose of determining the tax base of the partner's taxable year in which the partnership's taxable year ends. The partner's loss which exceeds his cost base is suspended until the partner acquires a sufficient cost base to offset the loss or until the partner's share is disposed of.

The related party's loss disallowance rule stated in Article 63(d) of this Law shall not be applicable to the partner's share of losses and expenses in a partnership in accordance with paragraph (b) of this Article. A partnership's loss which has been suspended according to Article 63(d) of this Law shall not be distributed among the partners until its conditions are fulfilled. The conditions shall be deemed fulfilled in case a loss is incurred in distribution upon the complete disposal of the partner's share.