I.
II.
III.
IV.
An Overview of the Taxation of Partnerships and Partners
a. Introduction to Subchapter K
b. Introduction to Choice of Business Entity
c. Tax Classification of Business Enterprises
i. In General
ii. Corporations v. Partnership
1. “Check-the-Box” Regulations
2. Existence of a Separate Entity for Federal Tax Purposes
a. Podell v. Commissioner
b. Allison v. Commissioner
3. Publicly Traded Partnerships
iii. Trusts
iv. Tax Policy Considerations
1. Joint Committee on Taxation, Review of Selected Entity
Classification and Partnership Tax Issues
Formation of a Partnership
a. Contributions of Property
i. General Rules
1. Revenue Ruling 99-5
ii. Introduction to Partnership Accounting
b. Treatment of Liabilities: The Basics
i. Impact of Liabilities on Partner’s Outside Basis
ii. Contributions of Encumbered Property
c. Organization and Syndication Expenses
Operations of a Partnership: Generals Rules
a. Tax Consequences of the Partnership: Aggregate and Entity Principles
i. The Partnership as an Entity
1. Revenue Ruling 68-79
2. Demirjian v. Commissioner
ii. Assignment of Income
1. Schnner v. Commissioner
iii. The Taxable Year
b. Tax Consequences to the Partners
c. Limitations on Partnership Losses
i. Basis Limitations
Partnership Allocations: Section 704(b)
a. Introduction
b. Special Allocations Under Section 704(b)
i. Background: The Substantial Economic Effect Concept
1. Orrisch v. Commissioner
ii. The Section 704(b) Regulations: Basic Rules
1. Introduction
2. Maintenance of Partner’s Capital Accounts
3. Economic Effect
V.
VI.
VII.
4. Substantiality
a. Revenue Ruling 99-43
5. Default Reallocations: The Partner’s Interest in the Partnership
6. Special Rules
iii. Allocations Attributable to Nonrecourse Debt
iv. A Different Approach: Target Allocations
Partnership Allocations: Income-Shifting Safeguards
a. Allocations with Respect to Contributed Property
i. Introduction
ii. Sales and Exchanges of Contributed Property
1. Section 704(c) Allocation Methods
2. Characterization of Gain or Loss on Disposition of Contributed
Property
iii. Depreciation of Contributed Property
iv. Other Applications of Section 704(c) Principles
v. Distributions of Contributed Property
vi. Anti-Abuse Rules for Loss Property
Partnership Liabilities
a. Introduction
b. Recourse Liabilities
c. Nonrecourse Liabilities
i. Revenue Ruling 95-41
d. Tiered Partnerships
Compensating the Service Partner
a. Payment for Services: General Rules
i. Introduction
ii. Partner Acting in Non-Partner Capacity
1. Pratt v. Commissioner
2. Armstrong v. Phinney
iii. Disguised Payments
iv. Guaranteed Payments
1. Gaines v. Commissioner
2. Revenue Ruling 69-180
3. Revenue Ruling 2007-40
b. Partnership Equity Issued in Exchange for Services
i. Introduction
ii. Receipt of a Capital Interest for Services
1. McDougal v. Commissioner
iii. Receipt of a Profits Interest for Services
1. Hale v. Commissioner
2. Diamond v. Commissioner
3. Revenue Procedure 93-27
iv. Proposed Regulations
v. Policy Issues: Taxation of “Carried Interests”
VIII.
IX.
X.
XI.
Property Transactions Between Partners and Partnerships
a. Payments for the Use of Property
b. Sales and Exchanges of Property Between Partners and Partnerships
i. Sales and Exchanges with Respect to Controlled Partnerships
ii. Disguised Sales
1. Canal Corp. v. Commissioner
iii. Transfers of Property and Related Allocations
Sales and Exchanges of Partnership Interests
a. Consequences to the Selling Partner
i. Amount and Character of Gain or Loss: Section 751(a)
1. Glazer v. Commissioner
2. Ledoux v. Commissioner
ii. Capital Gains Look-Through Rule
iii. Collateral Issues
1. Holding Period
2. Installment Sales of Partnership Interests
3. Revenue Ruling 89-108
b. Consequences to Buying Partner
Operating Distributions
a. Introduction
b. Consequences to the Distributee Partner
i. Non-recognition Rules on the Distribution
1. Revenue Ruling 94-4
2. Revenue Ruling 79-205
ii. Consequences on Subsequent Sales of Distributed Property
c. Consequences to the Distributing Partnership
d. Mixing Bowl Transactions
i. Distributions of Contributed Property to Another Partner
ii. Distributions of Other Property to the Contributing Partner
e. Distributions Which Alter the Partner’s Interest in Ordinary Income Property
Liquidating Distributions
a. Introduction
b. Liquidation of a Partner’s Interest
i. Section 736(b) Payments
ii. Section 736(a) Payments