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A liability that gives rise to basis refers to a loan or debt that increases the tax basis of a partnership or ownership interest in a business. Essentially, when a partner or business owner takes on debt for their share of the business, it can increase their tax basis, which affects the amount of gain or loss recognized in a taxable sale or transaction. On the other hand, a disallowed Business Interest Expense (BIE) carryforward is related to the limitation on business interest expense deduction, which was introduced by the Tax Cuts and Jobs Act (TCJA) in 2017. If a taxpayer's business interest expense exceeds a specified threshold, they may not be able to fully deduct that expense in the current tax year. The excess portion becomes a disallowed BIE carryforward that can be used to offset future taxable income in subsequent years. The main difference between the two is that a liability that gives rise to basis affects the tax basis in a partnership or ownership interest, while a disallowed BIE carryforward is related to the limitation on the deductibility of business interest expenses.