Tax allocations for securities partnerships.
The Tax Adviser › Vol. 34 Nbr. 8, August 2003
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Tax allocations for securities partnerships.
Due to several factors, including the volume of trading, frequency of changes in partners' profit and loss (P&L)-sharing percentages and their entering and exiting a partnership, realized gains and losses cannot be allocated for tax purposes based on the partners' economic percentages in the period the gain or loss is recognized, without creating some inequity. This type of allocation would lack Sec. 704 "substantial economic effect" because the allocation of recognized gains or losses might not be c...
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