§709 — Treatment of organization and syndication fees
20 cases·4 followed·5 distinguished·1 questioned·10 cited—20% support
Statute Text — 26 U.S.C. §709
Except as provided in subsection (b), no deduction shall be allowed under this chapter to the partnership or to any partner for any amounts paid or incurred to organize a partnership or to promote the sale of (or to sell) an interest in such partnership.
If a partnership elects the application of this subsection (in accordance with regulations prescribed by the Secretary) with respect to any organizational expenses—
the partnership shall be allowed a deduction for the taxable year in which the partnership begins business in an amount equal to the lesser of—
the amount of organizational expenses with respect to the partnership, or
$5,000, reduced (but not below zero) by the amount by which such organizational expenses exceed $50,000, and
the remainder of such organizational expenses shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the partnership begins business.
In any case in which a partnership is liquidated before the end of the period to which paragraph (1)(B) applies, any deferred expenses attributable to the partnership which were not allowed as a deduction by reason of this section may be deducted to the extent allowable under section 165.
The organizational expenses to which paragraph (1) applies, are expenditures which—
are incident to the creation of the partnership;
are chargeable to capital account; and
are of a character which, if expended incident to the creation of a partnership having an ascertainable life, would be amortized over such life.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.709-1 Treatment of organization and syndication costs
- Treas. Reg. §Treas. Reg. §1.709-1(a) General rule.
- Treas. Reg. §Treas. Reg. §1.709-1(b) Election to amortize organizational expenses—(1) In general.
- Treas. Reg. §Treas. Reg. §1.709-2 Definitions
- Treas. Reg. §Treas. Reg. §1.709-2(a) Organizational expenses.
- Treas. Reg. §Treas. Reg. §1.709-2(b) Syndication expenses.
- Treas. Reg. §Treas. Reg. §1.709-2(c) Beginning business.
20 Citing Cases
To address this issue, section 709 of the Act amends section 362(a)(8) of the Bankruptcy Code to specify that the automatic stay is limited to an individual debtor's prepetition taxes (taxes incurred before entering bankruptcy) . The amendment clarifies that the automatic stay does not apply to an individual debtor's postpetition taxes .
709 . There is no indication in the legislative history that the change from "concerning the debtor" to "concerning the tax liability of the debtor" should alter the way the statute is interpreted with regard to the debtor . Rather, this amendment clarifies how the statute had been interpreted by the courts before the amendment . The legislative history describes the purpose of this amendment as follows : "Under current law, the filing of a petition for relief under the Bankruptcy Code activates
t apply here. This construction is consistent with the recently amended language of 11 U.S.C. sec. 362(a)(8). People Place Auto Hand Carwash, LLC v. Commissioner, supra at 364; see also Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 sec. 709. There is no indication in the legislative history that the change from "concerning the debtor” to “concerning the tax liability of the debtor” should alter the way the statute is interpreted with regard to the debtor. Rather, this amendment
In addition, section 709 provides that the stay applies to both prepetition and postpetition tax liabilities of a corporation so long as it is a liability that the bankruptcy court may determine.
23, 127. We see no reason that our prior interpretation of the statute should change as a result of the amendment. The amendment clarifies what we understood, that the automatic stay applies only if the case before us concerns the tax liability of the debtor-taxpayer. See Stanwyck v. Commissioner, T.C. Memo. 2009-73, slip op. at 6.
§§ 709.2102(9), 709.2301 (2022). An agent appointed under a power of attorney has a fiduciary relationship to the principal. Fla. Stat. § 709.2114(1). Therefore, “[n]otwithstanding the provisions in the power of attorney” an agent “[m]ust act in good faith” and “[m]ay not act contrary to the principal’s reasonable expectations actually known by the
2 The FPAA also disallowed a $1,087,819 business expense deduction on the ground that it was a “nondeductible syndication expense,” see § 709, and lacked sub- stantiation, see § 162.
Expenses paid in 2013 with respect to the 68 Camaro would be deductible, if at all, through depreciation or as startup expenses under section 709 (applicable to partnerships) or section 195.
Expenses paid in 2013 with respect to the 68 Camaro would be deductible, if at all, through depreciation or as startup expenses under section 709 (applicable to partnerships) or section 195.
e by one of the following acting in an official capacity-- (A) the President; (B) a Member or Members of Congress, or the Congress; (C) a member of a uniformed service; (D) an individual who is an employee under this section; (E) the head of a Government controlled corporation; or (F) an adjutant general designated by the Secretary concerned under section 709(c) of title 32.
e by one of the following acting in an official capacity-- (A) the President; (B) a Member or Members of Congress, or the Congress; (C) a member of a uniformed service; (D) an individual who is an employee under this section; (E) the head of a Government controlled corporation; or (F) an adjutant general designated by the Secretary concerned.under section 709(c) of title 32.
709.08(1) (West Supp. 1996), and even a durable power is revoked by a judgment of total or partial incapacity by a court, as occurred here. See Fla. Stat. Ann. sec. 709.08(3)(b) (West Supp. 1996). Respondent concedes that petitioner was, in fact, left mentally and physically incompetent by the stroke. Respondent’s Form 2848 (Power of Attorney