Proposed regulations eliminate deemed distributions on technical termination of partnerships.
The Tax Adviser › Vol. 27 Nbr. 9, September 1996
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Summary
The IRS has issued proposed regulations under IRC section 708(b)(1)(B) that simplify the deemed distribution treatment of partnership interests when a partnership is terminated by the sale of exchange of over 50% of the total interest in a 12-month period. Prior treatment posed the risk of gain recognition for continuing partners. Under the new regulations, partners do not receive a distribution and the interests are distributed to the new partnership that is formed.
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Extract
Proposed regulations eliminate deemed distributions on technical termination of partnerships.
Background
Sec. 708(b)(1)(B) provides that if within a 12-month period there is a sale or exchange of 50% or more of the total interest in partnership capital or profits, a partnership shall be considere...See the full content of this document
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