What is a nonliquidating distribution
Elliott Manning, AB (with honors) Columbia College (1955), JD m.c.l., Harvard Law School (1958). M., Partnerships—Disposition of Partnership Interests or Partnership Business; Partnership Termination; Choosing the Business Entity (Little Brown 1995); and Corporate Buy-Sell Agreements (Little Brown 1995). General Rules Applicable to Partnership Distributions B. Subsequent Sales of Distributed Property Introductory Material A.
This Portfolio analyzes not only the relevant statutory and regulatory materials, but also the large body of case law, revenue rulings, and other IRS pronouncements, including technical advice memoranda and private letter rulings, that are all part of this, unfortunately complex, body of tax law. Worksheet 7 Omnibus Budget Reconciliation Act of 1993 Conference Report Section 13206(e) - Definition of “Substantially Appreciated” Inventory (P. Worksheet 7B Taxpayer Relief Act of 1997 Worksheet 8 ABCD Partnership Agreement (Liquidation Article). Worksheet 7A General Agreement on Tariffs and Trade, Section 741 of the Revenue Provisions (Title VII), Relating to Partnership Distributions (Act Language and Technical Explanation) (1994).Part I, Introduction, briefly discusses important general principles not directly related to distributions, but that will nevertheless frequently be referred to throughout the Portfolio, including partnership capital accounts, §704(c) and reverse §704(c) allocations. Basis of Property Received in a Current Distribution 1. Part I then addresses the vexing question of distinguishing a partner withdrawal from sale of a partnership interest (which are considered in more detail in 718 T. Partnerships — Disposition of Partnership Interests or Partnership Business; Partnership Termination). Distribution of Marketable Securities (1) In General (2) Definition of Marketable Securities (3) Exceptions (a) Marketable Securities Contributed By Distributee Partner (b) Securities Not Marketable When Acquired By Partnership (c) Securities Acquired In a Nonrecognition Transaction (d) Anti–Stuffing Rule (4) Distribution By Investment Partnership (a) Investment Partnership (b) Eligible Partner (5) Limitation on Gain (6) Basis Rules (a) Basis of Distributed Securities (b) Partner's Basis in Partnership and Partnership's Basis in Other Assets (7) Character of Gain Recognized (8) Anti–Abuse Rule 2. Ordering Rules - Liabilities Assumed and Relieved D. Part I concludes with a brief discussion of the general anti-abuse regulations. Distribution to Contributing Partner - Section 737 C.
Part II discusses the principles applicable to all distributions — current and liquidating — including distinguishing between them — and the general principles for nonrecognition of gain or loss on distributions of partnership property in kind, and the effect of partnership liability shifts as part of distributions.
Distributions, usually liquidating distributions, are important components of major partnership restructurings, including divisions, mergers, incorporations, and changes in legal form. Transfers After December 14, 1999 (1) Allocations Between Asset Classes (2) Allocations Within Asset Classes (3) Increases (4) Decreases (5) Special Rule for Stock of Corporate Partners: 755(c) (6) Requirement that Difference Between Value and Basis Be Reduced b. Timing of Basis Adjustments Caused by Liquidation of Partner's Interest 4.
As with all other aspects of partnership taxation, the dual nature of a partnership for tax purposes — as at times an aggregation of its partners, and at times an entity — complicates the discussion, particularly because no one, including the author, has been able to articulate a comprehensive statement of when the aggregate, and when the entity, aspect should predominate.
Despite these factors, the Check-the-Box regulations, Regs.
§§301.7701-2 and -3, recognize partnership as the default tax classification for all domestic entities that are not organized as corporations or joint stock companies, or engaged in certain regulated businesses like banking and insurance.
Payments in Respect of Partnership Property - Section 736(b) (1) Definition of 736(b) Payments (2) Valuation of a Partner's Interest in Partnership Property (3) Tax Consequences of 736(b) Payments (4) Section 736(b) Payments Attributable to 751 Property (5) Section 736(b) Payments - Effects on Partnership (6) Series of 736(b) Payments b. Determination of Amount Includible in Gross Estate 1.