Partnership Tax

Professor Holz
Spring Semester 2016
Syllabus

Required Materials:

Richard Lipton, Paul Carman, Charles Fassler, & Walter Schwidetzky, Partnership Taxation (3rd
Ed. 2012)

Federal Income Tax Code and Regulations: Selected Sections Dickinson, Editor (CCH), or its
equivalent. Current version.

The Text and the Code and Regulations must be brought to each class.

Recommended Materials:

Cunningham & Cunningham, The Logic of Subchapter K, (4th Ed.)

Other Useful Resources:

McKee, Nelson, Whitmire, Federal Taxation of Partnerships and Partners

BNA, Tax Management Portfolios

Course Description:

This course will cover the fundamentals of Federal partnership taxation. We will
consider the tax consequences of partnership formation, operations, and allocations; transactions
between partners and partnerships; sales and exchanges of partnership interests; operating
distributions; and liquidating distributions and partnership terminations. In addition, we will also
discuss the exchange of services for partnership interests and a variety of anti-abuse provisions
found in Subchapter K.

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Grading:

Grades will be determined by an in-class exam and classroom participation/performance

as follows:

Final Exam 90%

Classroom Participation/Performance 10%

Attendance:

You are allowed a maximum of two (2) absences. Each additional absence may result in
a reduction of your grade to the next lower grade (e.g., from a B to a B-). Initialing the
attendance roster certifies attendance during the entire class session. If for any reason you will
miss part of the class, you need to inform me prior to departing or signing the attendance sheet,
so that an appropriate adjustment can be made. Failure to be prepared for class may be counted
as an absence.

Final Exam:

You will be allowed to bring your Code and Regulations, and a calculator. You may not
bring any other materials to the exam. Prohibited materials include, but are not limited to: other
books; individual notes and outlines; and commercial outlines.

You are permitted to annotate your Code and Regulations by making relevant notes in the
text and margins of the sections that you study in this and other classes. You will also be
permitted to use the front and back cover for notes. However, no other pages may be annotated.
If you have questions, please ask, rather than risk a violation of the honor code.

Contact Information:

My office phone number is (614) 462-2296 and my email is richard.holz@icemiller.com.

Feel free to call, or email with questions.

Cell Phones:

For the comfort and convenience of your fellow students, please turn off all cell phones
and pagers prior to entering class. If there is an urgent reason that you must leave your phone or
pager on for one class, please notify me before class.

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 Partnership Tax
Professor Holz
Spring Semester 2016

Assignments (Subject to Change)

Week 1

1. Introduction
Text: skim 1-9

2. Defining Partnerships and Partners For Tax Purposes: Chapter 1

Text: 11-40
Code: 761, 7701(a)(2), 7701(i),
Regs: 1.761-2(a), (b) and (c), 301.7701-1 through 4(d), Proposed Reg. 301-
7701(a)(5)
Cases: Commr v. Culbertson, 337 U.S. 733 (1949)
Madison Gas & Electric Co. V. Commr, 72 T.C. 521 (1979)
Other: Rev. Proc. 2002-22
Problems: 1, 2 (skip part c), 3, 5, 7, 9, 10, 11, 12, 13

Week 2

Formation of the Partnership: Chapter 2

Text: 47-66
Code: 108(e)(8)(b), 709, 721, 722, 723, 724 1223(1), 1223(2)
Regs: 1.108-8(b)(2), 1.709-2 1.351-1(b)-(c), 1.721-1, 1.722-1, 1.1223-3(b), (f)
Cases: Otey v. Commr, 70 T.C. 321 (1970), affd per curiam 634 F.2d 1046 (6th
Cir. 1980)
Other: Rev. Rul. 84-52, 1984-1 CB 157
Rev. Rul. 99-5, 1999-1 CB 434
Problems, 1-4

Week 3

Outside Basis and Allocation of Liabilities: Chapter 3

Text: 69-89
Code: 702(a)(4), 704(d), 705, 722, 731, 732, 733, 752
Regs: 1.705-1(a)(1), 1.722-1, 7.731-1(a)(1)(ii), 1.752-1, 1.752-2, 1.752-3,
1.752-4, 1.752-7
Other: Rev. Rul. 66-94, 1966-1 CB 166
Rev. Rul. 94-4, 1994-1 CB 195
Rev. Rul. 95-41, 1995-1 CB 132
Rev. Rul. 96-10, 1996-1 CB 138
Rev. Rul. 96-11, 1996-1 CB 140
Problems: 1-6

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Week 4

Operation of the Partnership: Calculation of Partnership Taxable Income:

Chapter 4
Text: 93-100, 103-105, 114-118
skim 105-114
Code: 108(d)(6), 108(e)(8)(B), 444, 447, 448, 464, 701, 702, 703, 704(d), 705,
706(d), 724, 7519
Skim 465, 469
Regs: 1.448-1T, 1.702-1, 1.704-1(d), 1.706-1(b)
Cases: United States v. Basye, 410 U.S. 441 (1973)
Other: Rev. Rul. 68-79, 1968-1 CB 216
Problems: 1, 2, 5, 6, 7

Week 5

Operation of a Partnership: Allocation of Partnership Income and Loss: Chapter 5

Section 704(b)
Text: 121-134
Code: 704(b)
Regs: 1.704-1(b)(1)(i), (iii), (iv), 1(b)(2)(i)-(iii), (iv)(a)-(e), (h), (n),
(p), (q), (1)(b)(3), 1(b)(5) examples 1-8, 15(i), 1.1245-1(e)
Other: Rev. Rul. 97-38, 1997-2 CB 69
Rev. Rul. 99-43, 1999-2 CB 506
Problems: 1-4

Week 6

Operation of a Partnership; Allocation of Partnership Income and Loss: Chapter 5

(Continued)

Partners Interest in the Partnership; Allocation Structures;

Section 704(b) (Continued)
Text: 134-151
Code: 705, 706(d)(1)
Regs: 1.704-1(b)
Problems: 5-13

Week 7

Operation of a Partnership: Allocation of Partnership Income and Loss: Chapter 5

(Continued)

Section 704(c)
Text: 151-162
Code: 704(a), (c)(1)(A), (3), 724

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 Reg: 1.704-3(a)(1)-(5), (10), (b), (c), (d), (e)(1), 1.704-
1(b)(1)(vi)(d)(1), (3), 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4)(i), 1.704-
1(b)(5) examples 14(i)-(iv)
Problems: 14-16

Week 8

Operation of a Partnership: Allocation of Partnership Income and Loss: Chapter 5

(Continued)

1. Nonrecourse Deductions
Text: 162-170
Regs: 1.704-2(b)-(e), (f)(1)-(3), (6), (7) Example 1, (g)-(j), (m)
examples 1(i)-(iv), (vi)-(viii), 3(i)
Problem: 17

2. Changes in Partnership Interests During the Tax Year

Text: 172-175
Code: 704(c)(2)(b), (d)
Regs: 1.706-1(c)(1), (2), (4)
Problem: 19

Week 9

Partnership Agreements: Discussion Draft of Partnership Agreement to be

provided.

Week 10

Disposition of Partnership Interests: Chapter 6

Text: 183-211
Code: 357, 706, 708, 741, 743(b), 743(d), 751(c), 751(d), 752(d), 754, 755,
761(e)
Regs: 1.704-4(c)(3), 1.706-1, 1.708-1, 1.737-2(a), 1.742-1, 1.743-1, 1.755-1,
1.761-1(c), 1.1001-2, 1.1011(b), 1223-3
Other: Rev. Rul. 75-194, 1975-1 CB 80
Rev. Rul. 81-38, 1981-1 CB 386
Rev. Rul. 84-53, 1984-1 CB 159
Rev. Rul. 84-111, 1984-2 CB 88
Rev. Rul. 89-108, 1989-2 CB 100
Rev. Rul. 92-15, 1992-1 CB 215
Rev. Rul. 93-80, 1993-2 CB 230
Problems: 1-4, 8, 10, 11

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Week 11

Partnership Distributions: Chapter 7

1. Nonliquidating Distributions
Text: 215-227
Code: 731, 732(a), (c)(1), (3), (d), 733, 735, 1245(b)(6)
Regs: 1.731-1(a)(1), (3), (c), -2, 1.732-1(a), (c), (d), 1.733-1, 1.735-1,
1.1245-1(f)(2), (3), 1.704-1(b)(2)(iv)(e)(1)
Other: Rev. Rul. 94-4, 1994-1 CB 196
Problems: 1-2

2. Section 734(b)
Code: 731(b), 734, 754, 755, 1245(b)(3)
Regs: 1.734-1. 1.755-1(a), (c)
Problem: 3

Week 12

Partnership Distributions: Chapter 7 (continued)

1. Section 751(b)
Text: 228-235
Code: 731(d), 732(e), 751(b)
Regs: 1.751-1(b)-(e), (g) example 2
Cases: Ledoux v. Commr, 77 TC 293, affd per curiam 695 F.2d
1320 (11th Cir. 1983)
Other: Rev. Rul. 77-412, 1977-2 CB 223
Rev. Rul. 84-102, 1984-2 CB 119
Notice 2006-14 (February 21, 2006)

2. Liquidations
Text: 235-243
Code: 708(a), (b)(1), 731(a)(2), 732(c)(2), 761(d), (e)(1), 736
Regs: 1.708-1(a), (b), 1.731-1(a)(2), 1.732-2(b), (c), 1.736-1
Cases: McCauslen v. Commr, 45 TC 588 (1966)
Other: Rev. Rul. 99-6, 1999-1 CB 432
Rev. Rul. 95-37, 1995-1 CB 130
Rev. Rul. 93-80, 1993-2 CB 239
Problem: 4

Week 13

Transactions Between Partner and Partnership; Issuance of a Partnership Interest

for Service: Chapter 8
Text: 249-271
Code: 83, 707, 267

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 Regs: 1.707-1, 1.707-3, 1.707-4, 1.707-5, 1.707-6, 1.707-8, Prop. Reg. 1.707-
7
Cases: Pratt v. Commr, 64 TC 203 (1975), affd in part, revd in part 550 F.2d
1023 (5th Cir. 1977)
Other: Rev. Rul. 81-300, 1981-2 CB 143
Rev. Rul. 81-301, 1981-2 CB 144
Notice 2005-43, 2005-24 I.R.B. 1221
Problems: 1-6

Week 14

Business Combinations: Partnership Mergers and Divisions: Chapter 9

Text: 275-286
Code: 708
Reg: 1.708-1(c), (d)
Other: Rev. Rul. 2004-43, 2004-1 CB 842
Problems: 1-8

Week 15

Anti-Abuse Provisions: Chapter 13

Text: 361-380
Code: 707(a)(2)(B), 707(c)(1)(B), 737, 731(c), 707(a)(2)(A)
Reg: 1.701-2, 1.707-3, -4, -5 and -6, 1.737
Other: Rev. Rul. 2004-43, 2004-1 C.B. 842
Problems: 2 and 3

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