Fundamentals of Partnership Taxation

by Lind, Stephen A.; Schwarz, Stephen; Lathrope, Daniel J.; Rosenberg, Joshua D.; Lind, Stephen A.

• ISBN13: 9781587782213
• ISBN10: 1587782219
• Format: Hardcover
• Copyright: 2002-10-01
• Publisher: Foundation Pr

Table of Contents

Preface	v
Acknowledgements	ix
Table of Internal Revenue Code Sections	xxi
Table of Treasury Regulations	xxxvii
Table of Revenue Rulings	xlv
Table of Miscellaneous Rulings	xlvii
Table of Cases	xlix
Table of Authorities	liii
PART ONE. Introduction	1	(26)
An Overview of the Taxation of Partnerships and Partners	2	(25)
Introduction to Subchapter K	2	(2)
Tax Classification of Business Enterprises	4	(16)
In General	4	(3)
Corporations and Partnerships	7	(10)
Trusts	17	(1)
Tax Policy Considerations	17	(3)
Introduction to Choice of Business Entity	20	(7)
PART TWO. Taxation of Partnerships and Partners	27	(368)
Formation of a Partnership	28	(45)
Contributions of Property	28	(12)
General Rules	28	(6)
Introduction to Partnership Accounting	34	(6)
Treatment of Liabilities: the Basics	40	(8)
Impact of Liabilities on Partner's Outside Basis	40	(3)
Contributions of Encumbered Property	43	(5)
Contributions of Services	48	(23)
Introduction	48	(1)
Receipt of a Capital Interest for Services	49	(8)
Receipt of a Profits Interest for Services	57	(14)
Organization and Syndication Expenses	71	(2)
Operations of a Partnership: General Rules	73	(45)
Tax Consequences to the Partnership: Aggregate and Entity Principles	73	(20)
The Partnership as an Entity	73	(5)
Assignment of Income	78	(12)
The Taxable Year	90	(3)
Tax Consequences to the Partners	93	(6)
General Rules	93	(4)
Electing Large Partnerships	97	(2)
Limitations on Partnership Losses	99	(19)
Basis Limitations	99	(1)
At--Risk Limitations	100	(9)
Passive Loss Limitations	109	(9)
Partnership Allocations	118	(103)
Introduction	118	(1)
Special Allocations Under Section 704(b)	119	(55)
Background: The Substantial Economic Effect Concept	119	(9)
The Section 704(b) Regulations: Basic Rules	128	(29)
Allocations Attributable to Nonrecourse Debt	157	(11)
Policy Considerations	168	(6)
Allocations with Respect to Contributed Property	174	(16)
Introduction	174	(3)
Sales and Exchanges of Contributed Property	177	(7)
Depreciation of Contributed Property	184	(3)
Other Applications of Section 704(c) Principles	187	(1)
Distributions of Contributed Property	188	(2)
Allocation of Partnership Liabilities	190	(19)
Introduction	190	(2)
Recourse Liabilities	192	(5)
Nonrecourse Liabilities	197	(10)
Tiered Partnerships	207	(2)
Allocations Where Partners' Interests Vary During the Year	209	(5)
The Family Partnership Rules	214	(7)
Transactions Between Partners and Partnerships	221	(29)
Payments for Services and the Use of Property	221	(22)
Introduction	221	(2)
Partner Acting in Nonpartner Capacity	223	(6)
Disguised Payments	229	(5)
Guaranteed Payments	234	(9)
Sales and Exchanges of Property Between Partners and Partnerships	243	(7)
Sales and Exchanges with Respect to Controlled Partnerships	243	(1)
Disguised Sales	244	(3)
Transfers of Property and Related Allocations	247	(3)
Sales and Exchanges of Partnership Interests	250	(33)
Consequences to the Selling Partner	250	(24)
The Operation of Section 751(a)	250	(17)
Capital Gains Look--Through Rule	267	(1)
Collateral Issues	268	(6)
Consequences to the Buying Partner	274	(9)
Operating Distributors	283	(36)
Introduction	283	(2)
Consequences to the Distributes Partner	285	(13)
Nonrecognition Rules on the Distribution	285	(10)
Consequences on Subsequent Sales of Distributed Property	295	(3)
Consequences to the Distributing Partnership	298	(5)
Mixing Bowl Transactions	303	(6)
Distributions of Contributed Property to Another Partner	304	(2)
Distributions of Other Property to the Contributing Partner	306	(3)
Distributions Which Alter the Partners' Interests in Ordinary Income Property	309	(10)
Liquidating Distributions and Terminations	319	(53)
Introduction	319	(2)
Liquidation of a Partner's Interest	321	(19)
Section 736(b) Payments	321	(5)
Section 736(a) Payments	326	(11)
Allocation and Timing of Section 736 Payments	337	(3)
Liquidation vs. Sale of a Partnership Interest	340	(9)
Liquidation of a Partnership	349	(23)
Voluntary Liquidation	349	(13)
Partnership Terminations Forced by Statute	362	(10)
The Death of a Partner	372	(16)
Introduction	372	(1)
Treatment of Income in Year of Partner's Death	372	(1)
Estate Taxation of Partnership Interests, Treatment of ``IRD'' Items and Basis Consequences	373	(13)
Consequences of a Sale or Liquidation of a Deceased Partner's Interest at Death	386	(2)
The Partnership Anti--Abuse Regulations	388	(7)
Introduction	388	(1)
Abusive Use of Subchapter K	389	(3)
Abusive Treatment of a Partnership as an Entity	392	(3)
PART THREE. Taxation of Other Pass--Through Entities	395	(62)
S Corporations and Their Shareholders	396	(61)
Introduction	396	(2)
Eligibility for S Corporation Status	398	(7)
Election, Revocation and Termination	405	(5)
Treatment of the Shareholders	410	(24)
Pass--Through of Income and Losses: Basic Rules	410	(2)
Loss Limitations	412	(7)
Sale of S Corporation Stock	419	(1)
Special Problems: Discharge of Indebtedness	420	(14)
Distributions to Shareholders	434	(3)
Taxation of the S Corporation	437	(7)
Coordination with Subchapter C	444	(5)
Compensation Issues	449	(4)
Tax Policy Issues: Subchapter K vs. Subchapter S	453	(4)
Appendix	457	(2)
Index	459