《税收概述》（英文版） chapter 10 special partnership

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1 Chapter 10: Special Partnership Issues

SPECIAL PARTNERSHIP ISSUES (1 of 2) Nonliquidating distributions §751 assets Liquidating distributions Sale of partnership interest Retirement or death of a partner ermination of a partnership 2

2 SPECIAL PARTNERSHIP ISSUES(1 of 2) Nonliquidating distributions §751 assets Liquidating distributions Sale of partnership interest Retirement or death of a partner Termination of a partnership

SPECIAL PARTNERSHIP ISSUES (2 of 2 Optional basis adjustments Special forms of partnerships Electing large partnerships 3

3 SPECIAL PARTNERSHIP ISSUES(2 of 2) Optional basis adjustments Special forms of partnerships Electing large partnerships

Nonliquidating Distributions General rules Precontribution gain Basis effects of distributions Holding period and character of distributed property

4 Nonliquidating Distributions General rules Precontribution gain Basis effects of distributions Holding period and character of distributed property

General rules No gain or loss by either partner or partnership Money "distributions in excess of partner's basis triggers capital gain recognition by partner Money" includes cash, reduction of partner's liabilities, FMV of securities 5

5 General Rules No gain or loss by either partner or partnership “Money” distributions in excess of partner’s basis triggers capital gain recognition by partner “Money” includes cash, reduction of partner’s liabilities, FMV of securities

Precontribution Gain lllll Precontribution gain definition Contributed property W/FMV> tax basis on date transferred to partnership Gain recognized by contributing partner w/in seven years if Distribution of contributed property to any OTHER partner Distributions W/ FM> partner's basis

6 Precontribution Gain Precontribution gain definition –Contributed property w/FMV > tax basis on date transferred to partnership Gain recognized by contributing partner w/in seven years if –Distribution of contributed property to any OTHER partner –Distributions w/ FMV > partner’s basis

Basis effects of distributions General rule Partnerships basis in distributed property carries over to partner Partner's basis in partnership reduced by Money received and Basis of other property received

7 Basis Effects of Distributions General rule –Partnership’s basis in distributed property carries over to partner Partner’s basis in partnership reduced by – Money received and –Basis of other property received

Holding Period and Character of Distributed Propert Partner's holding period includes partnership's holding period Character of gain/loss when property sold Generally same as for partnership Ordinary income/loss treatment for Unrealized receivables >>Inventory sold w/in 5 years of distribution After, character determined at partner level 8

8 Holding Period and Character of Distributed Property Partner’s holding period includes partnership’s holding period Character of gain/loss when property sold –Generally same as for partnership –Ordinary income/loss treatment for »Unrealized receivables »Inventory sold w/in 5 years of distribution • After, character determined at partner level

8751 Assets 8751 assets Property likely to produce ordinary income when sold or collected Unrealized receivables Substantially appreciated inventory Significance of 8751

9 §751 Assets §751 assets –Property likely to produce ordinary income when sold or collected Unrealized receivables Substantially appreciated inventory Significance of §751

Unrealized receivables lllll Unrealized receivables include Accounts receivable for cash basis partnership Ordinary income recapture items 》§§12450r1250( depreciation) 》§§617(d)( mining properties) 》§§1252( farmland) 》§§1254(oi, gas and geotherma 10

10 Unrealized Receivables Unrealized receivables include –Accounts receivable for cash basis partnership –Ordinary income recapture items »§§1245 or 1250 (depreciation) »§§617(d) (mining properties) »§§1252 (farmland) »§§1254 (oil, gas and geothermal)