From what I have read, if I have received distributions but the amount of those distributions is far less than what I paid to purchase the stock shares (the cost basis?), then I am not liable for any taxes on the distributions. Am I correct or am I wrong? ========>>>>>>> CORRECT AS PART OF YOUR RETURN OF INVESTMENT/CAPITAL.Your adjusted basis in the partnership interest is decreased but not below 0 by the money and adjusted basis of property distributed to you , as a partner.in general, A partnership generally does not recognize any gain or loss because of distributions it makes to partners.so, certain types of distributions / any distributions that exceed your basis may result in gains /losses that must be reported for the year in which they occur.
Of course I am sure that I am still liable for any gains in the stock value itself when I sell the stock.=======>>>>>>>>> Tax basis is the amount upon which taxable gain or loss, if any, will be calculated on the occurrence of various events;basically, the basis of a partnership interest is the money plus the adjusted basis of any property you contributed.there are 2 types of tax bases concerning partnerships. The inside basis is the partnership's tax basis in the individual assets thatis the same as the contributing person’s basis in the asset.The outside basis is the tax basis of each individual partner's interest in the partnership. Whenyou contribute property to the partnership, your basis in the contributed property is equal to its FMV. However, the outside basis increases only by the amount of the basis that you had in the property.for example, If you must recognize gain as a result of the contribution, this gain is included in the basis of your interest. Any increase in your individual liabilities because of an assumption of partnership liabilities is considered a contribution of money to the partnership by you.