Originally Posted by Slow But Steady
There is that.
I seem to recall that there are also some bad consequences if your basis ever goes to zero. That's unlikely, though, if the partnership is making ongoing investments.
I think a successful partnership held long term would very likely go to zero if the you did not add to your holdings from time to time.
I have used royalty trusts on and off.for years. Here the rules require that every separate buy be accounted and depreciated separately. So you may get to zero basis on some of your units, while still having a positive basis on others. This is actually ok, as when cost depletion is over (ie. when a tranche has been depreciated to zero), you can use percentage depletion.