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West Academic Publishing
Partnership Income Taxation / Edition 4

Partnership Income Taxation / Edition 4

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This handbook examines partnership tax laws, enabling readers to easily understand specific provisions within a larger context. Some of the topics covered include what constitutes a partnership; partnerships vs. corporations; partnership vs. co-ownership of property; the pass-through principle of partnership taxation; an introduction to partnership debt; allocations of partnership income; transactions between partnerships and their partners; sales of partnership interests; partnership distributions; payments to retiring partners; and the death of a partner.

Product Details

ISBN-13: 9781587787560
Publisher: West Academic Publishing
Publication date: 01/28/2005
Series: Concepts and Insights Series
Edition description: Older Edition
Pages: 253
Product dimensions: 6.20(w) x 9.30(h) x 0.50(d)

Table of Contents

Chapter 1The Pass-through Principle of Partnership Taxation1
CThe Timing of Partnership Income5
DThe Duration of a Partnership6
EPartners as Self-Employed Taxpayers6
FThe "Anti-Abuse" Regulations8
GComparison with Subchapter S10
Chapter 2An Introduction to Partnership Basis and Limits on Losses11
AThe Tax Basis of Partnership Interests and Partnership Property11
BThe Effects of Partnership Debt Transactions Upon Basis13
CLimits on the Deductibility of Partnership Losses14
1Section 704(d)15
2The at-Risk Rules of Section 46516
3The Passive-Loss Rules of Section 46917
DComparison with Subchapter S19
Chapter 3Contributions to Partnerships21
AContributions of Property21
1The Statutory Pattern21
2Holding Periods22
3Contributions of Encumbered Property23
4Depreciation Recapture24
5Character Issues: Section 72425
BContributions of Services26
1Receipt of an Interest in Partnership Capital26
2Receipt of an Interest in Partnership Profits29
CContributions Distinguished from other Transactions35
1Contribution vs. Sale to Partnership36
2Contribution vs. Sale or Exchange between Partners39
DComparison with Subchapter S39
Chapter 4Allocations of Partnership Income, Deductions, and Credits: An Introduction43
AAn Overview of the Code and Regulations43
BThe "Substantial Economic Effect" Test44
2Capital Accounts45
3The "Simple" Capital-Account Test for Substantial Economic Effect: Orrisch v. Commissioner49
4The "Substantial Economic Effect" Regulations52
aDetermining "Economic Effect" When Capital-Account Deficits Need Not Be Repaid53
bThe "Substantiality" Rules56
cSome Special Problems59
iiDeductions Attributable to Nonrecourse Debt63
iiiInteraction of Nonrecourse Deductions with the Alternate Test for Economic Effect68
ivAllocating Credits70
CComparison with Subchapter S70
Chapter 5Allocations Attributable to Contributed Property: Section 704(c)71
AAllocations of Gain or Loss71
BAllocations of Depreciation75
1The Traditional Method75
2The Traditional Method with Curative Allocations77
3The Remedial Allocation Method80
C"Reverse [section]704(c) Allocations" Under Section 704(b)83
DDistributions of Section 704(c) Property84
EDistributions of Property to a Partner Who Has Contributed Section 704(c) Assets85
FTransfer of Interests: Section 704(c)(1)(C)87
GComparison with Subchapter S88
Chapter 6Partnership Allocations: Assignment-of-Income Problems89
AFamily Partnerships89
BLast-Minute Partners: Section 706(d)92
CAssignments of Income Not Dealt with by Specific code Provisions: The Anti-Abuse Regulations93
DComparison with Subchapter S97
Chapter 7Allocation of Partnership Debt99
BWhat is a Partnership Liability Under [section] 752?99
CThe Definition of Recourse and Nonrecourse Debt100
2Economic Risk of Loss and Constructive Liquidation101
DAllocation of Recourse Liability103
1In General103
2Effect of Guarantees and Indemnifications of Recourse Debt106
3Contributions of Property Encumbered by Recourse Debt107
EAllocation of Nonrecourse Liability108
1The First Tier of Nonrecourse Debt Allocation108
aSufficient Basis for Nonrecourse Deductions108
2The Second Tier of Nonrecourse Debt Allocation110
3The Third Tier of Nonrecourse Debt Allocation111
4Effects of Guarantees of Nonrecourse Debt113
FObligations That are not "Liabilities" Under [section] 752114
Chapter 8Transactions between Partnerships and Their Partners119
AIncome-Related Payments: Distributive Shares and Section 707(a) Payments121
BFixed Payments: Guaranteed Payments and Section 707(a) Payments124
CDetermining Whether A "Partner Capacity" Payment is a Distributive Share or a Guaranteed Payment125
1Minimum Payments125
2Payments Measured by a Partnership's Gross Income128
DSome Other Aspects of Transactions Between Partners and Partnerships129
EComparison with Subchapter S129
Chapter 9Sales of Partnership Interests131
ATaxation of the Seller131
1The Seller's Amount Realized131
2Section 751(a)132
3Taxation of Look-through Gains under Section 1(h)136
BThe Buyer's Outside and Inside Bases138
1The Buyer's Outside Basis138
2Inside Basis Adjustments under Section 743(b)138
aDetermining the Transferee's Share of Inside Basis139
bAllocating [section] 743(b) Adjustments to Particular Assets142
cUsing the [section] 743(b) Adjustment146
dThe Section 754 Election147
3Basis Adjustments under Section 732(d)148
CCollateral Effects of a Sale of a Partnership Interest149
DComparison with Subchapter S150
1Calculating Gain on the Sale of Stock150
2Character of Gain and Inside Basis Adjustments upon Transfers of Interests150
3Termination by Sale152
Chapter 10Partnership Distributions: An Introduction153
AThe General Principle of Nonrecognition154
BCases in Which Gain or Loss is Recognized160
1Gain Recognition160
2Liquidating Distributions on Which Loss Is Recognized162
3"De Minimis" Distributions of Property164
4Distributions of Section 704(c) Property165
5Distributions Taxed under Section 737165
CTax Treatment of the Partnership167
DComparison with Subchapter S167
Chapter 11Distributions Subject to Section 751(b)169
ALiquidating Distributions of Assets Other Than Section 751 Assets172
BLiquidating Distributions of Section 751 Property177
CSection 751(b) and Current Distributions179
DThe Scope of Section 751(b): An Example181
EComparison with Subchapter S183
Chapter 12Payments to Retiring Partners: Section 736 and Related Problems185
1Interpreting Section 736-In General187
2Payments by Service Partnerships to General Partners188
BHow Section 736 Payments are Taxed192
DSome Complications197
1The Relationship between Section 736 and Section 751(b)197
2A Refinement in the Definition of Section 736(a) Payments198
3Liquidation of an Entire Partnership199
ESales and Retirement Payments Distinguished200
FProblems of "Form" and "Substance"203
GComparison with Subchapter S204
Chapter 13Basis Adjustments under Section 734205
AAdjustments Under Section 734206
1Distributions That Change the Basis of Property206
2Distributions on Which Gain or Loss Is Recognized208
3Allocating the Adjustment to Particular Assets210
BSection 734 and Anti-Abuse Rules212
CComparison with Subchapter S214
Chapter 14The Death of a Partner215
AIncome in Respect of a Deceased Partner215
2The Basis of an Inherited Partnership Interest216
BClosing the Partnership's Taxable Year Upon the Death of a Partner221
CSale or Liquidation of a Deceased Partner's Interest221
DComparison with Subchapter S222
Chapter 15What is a Partnership?225
APartnership vs. Cost-Sharing and Employment Arrangements226
BPartnership vs. Co-Ownership of Property227
CPartnership vs. Corporation230
DPublicly Traded Partnerships233
EElecting Large Partnerships234
Table of Cases237
Table of Internal Revenue Code Sections239
Table of Treasury Regulations and Rulings242

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