Another relatively recent variance from the treatment of DREs as “tax nothings” can be found in the Section 752 regulations, which deal with the allocation of partner-level tax basis arising from partnership-level debt. Under these complex rules, partnership debt is generally allocated to the partner or partners, if any, that bear the ultimate “economic risk of loss” for the debt. For example, where a partnership debt is guaranteed by a partner, that partner generally would be allocated the debt's entire associated tax basis. In determining which partner bears the economic risk of loss, the rules provide a general assumption that a partner is financially able to perform under any guarantee agreement irrespective of the partner's actual net worth, unless the facts and circumstances indicate a plan to circumvent or avoid the obligation. * As a result, tax planners were able to insert virtually valueless DREs as guarantors of partnership debt to secure the associated debt basis for use by the ultimate owners of the entities. Final regulations published on 10/11/06 significantly modified this approach for all partners holding partnership interests through a DRE. == Under Reg. 1.752-2(k)(1), where a partner holds his partnership interest through a DRE, the DRE's obligations are taken into account when determining the partner's economic risk of loss for the partnership-level liability only to the extent of the net value of the DRE as of the date on which the partnership determines the partner's share of partnership liabilities. 22 In the event that one or more DREs have payment obligations with respect to one or more liabilities of a partnership, the partnership must allocate the net value of each DRE among the liabilities in a reasonable and consistent manner, taking into account the relative priorities of those liabilities. °7 This special treatment of DREs in this context has been criticized by some commentators in that it uniquely singles out DREs when, in fact, any p