What must each partner do regarding their basis within a partnership?

Each partner in a partnership must track their basis independently because the basis represents each partner's investment in the partnership, including their share of liabilities. This basis is crucial for determining the gain or loss on the sale of the partnership interest, as well as for the allocation of losses and distributions.

The independent tracking of basis allows each partner to accurately report income and losses on their individual tax returns, ensuring that their tax obligations reflect their true economic interest in the partnership. Properly maintaining personal records of basis helps partners avoid disputes and allows them to make informed decisions regarding the partnership's operations and their own financial strategies.

While the partnership may maintain records of overall profits and losses, individual partners are responsible for their own basis calculations, which may vary due to personal contributions, withdrawals, and changes in the partnership's liabilities.