Partnerships Distributions, Sales, and Exchanges合伙

CCHFederalTaxationComprehensiveTopicsChapter20Partnerships—Distributions,Sales,andExchanges©2006,CCH,aWoltersKluwerbusiness4025W.PetersonAve.Chicago,IL60646-60858002483248—GeneralEffectonPartnersHowis“amountdistributed”toownerscomputed?Cash+debtrelief[i.e.,forpurposesofdetermininggain,onlycash+debtreliefaresubjecttocapitalgains.Otherpropertyreceivedbyapartneristax-free.]Whatistheowners’taxtreatmentforthe“amountdistributed?”Cash+debtrelief:Tax-freeuptooutsidebasis;Capitalgaintoapartnerontheexcessofcashordebtreliefinexcessofoutsidebasis.(Lossisneverrecognized.)Otherproperty:Tax-free.Chapter20,Exhibit1aCCHFederalTaxationComprehensiveTopics3of45Whatisthebasisofpropertydistributedtoanowner?Sameasthepartnership’sinsidebasis.[However,ifapartner’soutsidebasisislessthanthepartnership’sinsidebasisinpropertydistributedtoapartner,thenthepartner’sbasisofpropertyreceivedistakenfromhisoutsidebasis,notfromthepartnership’sinsidebasis.Thismakessense,giventhatapartner’soutsidebasismustbereducedbythe“amount”ofdistributionsandthatitcannotbenegative]Chapter20,Exhibit1bDistributions—GeneralEffectonPartnersCCHFederalTaxationComprehensiveTopics4of45Distributions—GeneralRulesCodeSections731to733TherulesindicatedbelowassumethatthepartnershipDOESNOTmakeadisproportionatedistributionoftheCodeSec.751“hot”assets.Whatisadistribution?AdistributionisatransferofvaluefromtheP/Stoapartnerinreferencetohisinterestinthepartnership.Adistributionmaybeintheformofmoney,debtrelief,orotherproperty.Anydecreaseinapartner’sallocableshareofP/Sdebtistreatedasadistributionofmoney.ThiscanresultfrompaymentofprincipalbytheP/Sonitsdebt.Also,adrawagainstapartner’sshareofpartnershipincomeisadistribution.Chapter20,Exhibit3aCCHFederalTaxationComprehensiveTopics5of45Distributions—GeneralRulesCodeSections731to733Willthepartnershiprecognizeeitheragainorlossonthedistributionofpropertytoapartner?Generallyno.EvendistributionsofCodeSec.1245orCodeSec.1250propertydonottriggerrecognitionunlessCodeSec.751(b)applies.Exception:Disproportionatedistributions.Chapter20,Exhibit3bCCHFederalTaxationComprehensiveTopics6of45Distributions—GeneralRulesCodeSections731to733Willthepartnerrecognizeeitheragainorlossonthedistribution?Capitalgainisrecognizedonlyifcashordebtreliefreceivedisgreaterthanheroutsidebasis.Lossisneverrecognized.CodeSec.731(a);Reg.1.731-1(a)(1).Ifthecashreceivedisadrawagainstprofitsandtheamountreceivedisgreaterthanoutsidebasis,gainisNOTrecognized.Thereason:Adistributionreducesoutsidebasisasshownbelow.However,theprofitsimpliedinadrawagainstprofitsincreasesbasisbyanequalamount.Thus,acashdrawwouldhaveazeroeffectonoutsidebasis.Whateffectdoesthedistributionhaveonthepartner’soutsidebasis?Heroutsidebasisisreducedbytheamountofcashplusthepartnership’sinsidebasisinthedistributedasset(s).However,heroutsidebasiscannotbereducedbelowzeroChapter20,Exhibit3cCCHFederalTaxationComprehensiveTopics7of45Distributions—GeneralRulesCodeSections731to733Whatisthebasisofthetransferredasset(s)tothepartner?Followthisstep-by-stepformula:(1)Reduceheroutsidebasisbytheamountofcashreceived.(2)(a)Ifherremainingoutsidebasisissufficient,shewilltakeabasisequaltothepartnership’sinsidebasisinthedistributedasset.(2)(b)IfherremainingoutsidebasisisNOTsufficient,shewillallocatethe“step-down”inbasisfirsttoassetswithabasisinexcessofFMV.(2)(c)Anyexcessofthe“step-down”overtheamountin(2)(b)isallocatedamongremainingassetsinaccordancewiththeirremainingbases.Chapter20,Exhibit3dCCHFederalTaxationComprehensiveTopics8of45Distributions—GeneralRulesCodeSections731to733Whatistheholdingperiodandcharacterofassetsdistributedfromapartnershiptoapartner?Theholdingperiodbeginsonthedayafterthedatethatthepartnershipacquiredtheasset.Thecharacterisdeterminedbytheusethatthepartnermakesoftheasset.CCHFederalTaxationComprehensiveTopics9of45ProportionateDistributions—ExampleFACTS:OnJuly1,Y1,ABCPartnershipdistributestoeachofitsequalpartners$10,000cashandlandwithafairmarketvalue(FMV)of$10,000andbasis(AB)of$5,000.ThethreeparcelsoflandwereacquiredbyABCon12/31/80.A,BandChaveoutsidebasesof$20,000,$10,000,and$5,000respectively.Thepartnershiphasthefollowingtax/bookbalancesheetpriortothedistribution.Chapter20,Exhibit4aCCHFederalTaxationComprehensiveTopics10of45Tax/BookBalanceSheetatJuly1,Y1AssetsEquitiesDescriptionInsideBasisCurrentFMVDescription:OutsideBasisCurrentFMVCash$50,000$50,000Debt0Receivable020,000Inventory20,00030,000Capital—A$20,000$70,000Land30,00060,000Capital—B10,00070,000Building10,00050,000Capital—C5,00070,000TOTALS$110,000$210,000$35,000$210,000ProportionateDistributions—ExampleChapter20,Exhibit4bCCHFederalTaxationComprehensiveTopics11of45QUESTION1:WhatarethetaxconsequencesofthedistributiontoA,BandC?QUESTION2:WhatresulttoCifhereceivesthelandfirstandthecashinasubsequentseparatedistributiononOctober1?QUESTION3:WhatresulttoCinQUESTION2,ifthecashdistributiononOctober1isadrawagainsthisshareofpartnershipincome,whichis$20,000fortheyear?ProportionateDistributions—Exa