not be treated as the first taxable year for which the taxpayer is an applicable taxpayer for any other purpose of this part. (2) Nontradable assets If there is an applicable transfer by a taxpayer of a nontradable covered asset after the taxpayer is again treated as an applicable taxpayer, the taxpayer's holding period of such asset for purposes of section 492 shall include all periods during which the taxpayer's status as an applicable taxpayer was previously terminated and the taxpayer held such asset. (c) Special rules relating to ownership of nontradable interests in applicable entities (1) In general For purposes of subsection (a), if an applicable taxpayer elects under subsection (a)(3) to treat a nontradable interest in an applicable entity held directly as a tradable covered asset for the first taxable year described in subsection (a)(1), the amount of the gain taken into account under subsection (a) with respect to such interest shall be equal to the excess (if any) of— (A) the value of such interest specified by the taxpayer under subsection (a)(3)(B), over (B) the taxpayer's adjusted basis in such interest as of the close of such taxable year. (2) Adjustments to bases of entity's nontradable assets (A) Partnerships (i) In general If the applicable entity is a partnership, the partnership shall increase the adjusted bases of the partnership’s assets by the amount described in paragraph (1). Such increase shall constitute an adjustment to the bases of partnership assets solely for determining the applicable taxpayer's share of such bases. (ii) Allocation The Secretary shall prescribe rules for the allocation of the increase in adjusted bases among partnership assets in a manner which has the effect of reducing the difference between the value and such adjusted bases. Such rules shall also provide proper adjustments to adjusted bases where ownership is held through tiered entities. (B) Other applicable entities Rules similar to the rules of clause (i) shall apply to applicable entities other than