Controversial ruling addresses distribution of partner's debt to obligor partner
Article Abstract:
A number of difficulties have been created by the Internal Revenue Service's Ruling 93-7, which looks at the income tax implications of the distribution by a partnership of a debt instrument to a partner who originally made the instrument. The ruling states that Section 731(b)'s general distribution arrangements are applicable, with the distribution of the debt not leading to any gain or loss for the partnership. However, it leads to inconsistency in the application of Section 731's property distribution regulations, and also causes problems because it creates a different tax result if the type of transaction is changed.
Publication Name: Journal of Partnership Taxation
Subject: Business
ISSN: 0749-4513
Year: 1993
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Partnerships with tax-exempt partners given guidance on avoiding UBTI
Article Abstract:
The Internal Revenue Service (IRS) has published planned regulations under Section 514(c)(9)(E) which will give extra guidance on the issue of unrelated business taxable income (UBTI) in relation to a partnership with tax-exempt partners investing in property. The regulations mainly cover the IRS's stance as detailed in Notice 90-41, but represent a somewhat more flexible approach. Section 514(c)(9)(E) is discussed in detail.
Publication Name: Journal of Partnership Taxation
Subject: Business
ISSN: 0749-4513
Year: 1993
User Contributions:
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