§708 — Continuation of partnership
56 cases·18 followed·9 distinguished·1 questioned·1 overruled·27 cited—32% support
Statute Text — 26 U.S.C. §708
For purposes of this subchapter, an existing partnership shall be considered as continuing if it is not terminated.
For purposes of subsection (a), a partnership shall be considered as terminated only if no part of any business, financial operation, or venture of the partnership continues to be carried on by any of its partners in a partnership.
In the case of the merger or consolidation of two or more partnerships, the resulting partnership shall, for purposes of this section, be considered the continuation of any merging or consolidating partnership whose members own an interest of more than 50 percent in the capital and profits of the resulting partnership.
In the case of a division of a partnership into two or more partnerships, the resulting partnerships (other than any resulting partnership the members of which had an interest of 50 percent or less in the capital and profits of the prior partnership) shall, for purposes of this section, be considered a continuation of the prior partnership.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.708-1 Continuation of partnership
- Treas. Reg. §Treas. Reg. §1.708-1(a) General rule.
- Treas. Reg. §Treas. Reg. §1.708-1(b) Termination—(1) General rule.
- Treas. Reg. §Treas. Reg. §1.708-1(c) Merger or consolidation—(1) General rule.
- Treas. Reg. §Treas. Reg. §1.708-1(d) Division of a partnership—(1) General rule.
- Treas. Reg. §Treas. Reg. §1.708-1(i) For purposes of section 708(b)(1)(A), the date on which the winding up of the partnership affairs is completed.
56 Citing Cases
708, I.R.C., causes a termination and triggers the partnership basis provisions causing a stepped-up basis (to fair market value) in the player contracts to 36X. Partnership claimed amortization deductions using the 36X basis. R contends that sec. 1056, I.R.C., applies and would limit the amortizable basis in the player contracts, even though the contracts were acquired through purchase of an interest in a partnership. Alternatively, R contends that if sec. 1056, I.R.C., does not apply to partne
37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708.
37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708.
37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708.
37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708.
37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708.
37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708.
37-38, each partnership was terminated in late 2001 and replaced by a new partnership pursuant to section 708.
Adjustment to Fair Market Value Upon Transfer ofPartnership Interest Ifan existing or new Partner acquires an Interest, the Capital Accounts ofthe Partners shall be adjusted to reflect fair market value ofall properties held by the Partnership. d. Adjustment for Constructive Termination of Partnership Capital Accounts shall be adjusted to reflect fair market value ofall properties held by the Partnership as required by Treasury Regulation Section 1.704-1(b)(2)(iv)(b) upon the constructive - 51
The sale of the petitioning partners ' BEP partnership interests caused a termination of BEP's tax year pursuant to section 708 .
Responent’s alternative argument is premised on the contention that a sale or exchange of a sports franchise and player contracts within the meaning of section 1056(a) occurred on the deemed distribution and recontribution of partnership property attributable to the partnership’s constructive section 708 termination.
hod. For all tax years beginning in 1998, the petitioning partners have reported the gain from this sale under the installment method. The sale of the petitioning partners’ BEP partnership interests caused a termination of BEP’s tax year pursuant to section 708. BEP made an election under section 754 to adjust the basis of the partnership assets (the inside basis) to equal BRLLC’s basis on its newly acquired BEP partnership interest (the outside basis) pursuant to section 743(b). The section 754
s Animal Farm." The estate argues that, notwithstanding "Darwin's eviction from active participation in the business", the partnership continued to exist during the years in issue for Federal tax purposes because there was no termination pursuant to section 708. Thus, according to the estate, partnership income for the years in issue must be allocated - 11 - equally to the partners, "in accordance with their respective partnership interests." Darwin and his wife oppose the estate's motion for su
s Animal Farm." The estate argues that, notwithstanding "Darwin's eviction from active participation in the business", the partnership continued to exist during the years in issue for Federal tax purposes because there was no termination pursuant to section 708. Thus, according to the estate, partnership income for the years in issue must be allocated - 11 - equally to the partners, "in accordance with their respective partnership interests." Darwin and his wife oppose the estate's motion for su
By contrast, in Estate of Skaggs, the Court relied on section 708, dealing with termination of a partnership, for its holding that the partnership in that case did not terminate by the death of one of its two partners.
3 Section 708 was amended by the Tax Cuts and Jobs Act of 2017, Pub. L. No. 115-97, § 13504(a), 131 Stat. 2054, 2141, effective for partnership taxable years beginning after December 31, 2017, by deleting the “technical termination” provision at issue here. That provision, section 708(b)(1)(B), provided that a partnership shall be considered terminat
In the FPAAs, the IRS adjusted the following items ofGroup and Trading: (1) distributions ofproperty other than money; (2) partnership liabilities; (3) capital contributed during the year; (4) other decreases on Schedule M-2, Analysis ofPartners' Capital Accounts (distributions to a former partner due to section 708 termination); and (5) recharacterization ofthe partnerships under the sham transaction, the partnership anti-abuse rules, and the economic substance doctrine.
ecisely, raise a genuine issue about whether) 7050 terminated at the end of 2001, then he could argue that any distribution then occurring resulted in a liquidation of his interest and qualified for section 732(b) basis treatment . This takes us to section 708 . Section 708(b)(1)(A) tells us that a partnership terminates only if "no part of any business, financial operation, or venture of the partnership continues to be carried on by any of its partners in a partnership ." The regulations state
the Transfer will not result in the termination of the Company pursuant to Code Section 708 ; 6 .1 .1 .4 .
The court held that the cessation of a partnership’s primary purpose is not necessarily a termination under section 708 but what is required by the statute is a complete cessation of all partnership activity, inclusive of a distribution to the partners of all of the partnership’s assets.
The court held that the cessation of a partnership’s primary purpose is not necessarily a termination under section 708 but what is required by the statute is a complete cessation of all partnership activity, inclusive of a distribution to the partners of all of the partnership’s assets.
The regulations underlying section 708 provide special rules governing the deemed distribution of partnership assets in the event of a partnership termination.
708.08 (West 1988); Holland v. Holland, 406 So.2d 496, 497-498 (Fla. Dist. Ct. App. 1981). In the instant cases, the parties have stipulated that Mr. Scarfia purchased the partnership interest in his name, and that the partnership issued all Schedules K-1 solely in Mr. Scarfia's name. We conclude that Mrs. Scarfia had neither a joint interest
708.08 (West 1988); Holland v. Holland, 406 So.2d 496, 497-498 (Fla. Dist. Ct. App. 1981). In the instant cases, the parties have stipulated that Mr. Scarfia purchased the partnership interest in his name, and that the partnership issued all Schedules K-1 solely in Mr. Scarfia's name. We conclude that Mrs. Scarfia had neither a joint interest