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Origins And Evolution Of Section 751(B), Karen C. Burke
Origins And Evolution Of Section 751(B), Karen C. Burke
UF Law Faculty Publications
Section 751(b), reputedly one of the most widely ignored provisions of Subchapter K of the Internal Revenue Code, reserves its most daunting complexity for nonprorata current distributions of property other than cash. While partnership tax has been revolutionized by increasingly sophisticated capital-accounting rules, the 1956 regulations implementing section 751(b) have never been updated to reflect the modern concept of revaluations and section 704(c) special allocations. Recently, the Treasury Department has requested comments concerning alternative approaches that would simplify and rationalize accounting for shifts of ordinary income and capital gain among partners.
This article considers proposals to replace the imputed exchange …
Taxing Hot Asset Shifts, Karen C. Burke
Taxing Hot Asset Shifts, Karen C. Burke
UF Law Faculty Publications
The Article comments on I.R.S. Notice 2006-14 which proposes to simplify and rationalize the collapsible partnership rules of section 751(b). It concludes that the proposed hot asset sale approach represents much needed improvement of section 751(b) but suggests that the Treasury should also consider more fundamental reform that would treat a nonprorata current distribution as a partial liquidation. The Article also explores the relationship between sections 734(b) and 751(b), focusing on the 1954 ALI proposals and Professor Andrews' more recent proposals concerning hot asset distributions and mandatory basis adjustments. The Article is an outgrowth of the author's work as a …