§722 — Basis of contributing partner’s interest

Section 722 provides: The basis of an interest in a partnership acquired by a contribution of property, including money, to the partnership shall be the amount of such money and the adjusted basis of such property to the contributing partner at the time of the contribution increased by the amount (if any) of gain recog

Section 722 provides that the basis of an interest in a F .

It provides that the adjusted basis of a partner’s interest shall be the basis determined under section 722 or section 742, increased or decreased by certain amounts (including the partner’s distributive share of partnership income and losses).

It is determined that, even if the foreign currency option ( s) are treated as having been contributed to Petaluma FX Partners , LLC, the amount treated as contributed by the partners under section 722 of the Internal Revenue Code is reduced by the amounts received by the contributing partners from the contemporaneous sales of the call option(s) to the same counter-party.

Similarly, the partnership’s basis in property contributed to a partnership by a partner is the 79 A partner’s distributive share is generally determined by reference to the partnership agreement; however, if the allocations in the partnership do not have “substantial economic effect” (as determined under sec. 704 and the regulations), th

As relevant here, the partner’s adjusted basis in the partnership interest is the basis of such interest determined under section 722, increased or decreased by the partner’s distributive share of income, loss, and applicable expenditures.

722 provides that the basis of a partnership interest acquired by contribution of property, including money, is “the amount of such money and the adjusted basis of such property to the contributing partner at the time of the contribution”. For purposes of sec. 722, a contribution of money includes: “Any increase in a partner’s share of the lia

Section 722 provides that the basis of a partnership interest acquired by contribution of property, including money, is "the amount of such money and the adjusted basis of such property to the contributing partner at the time of the contribution". For purposes of section 722, a contribution of money includes "Any increase in a partner's share of th

Section 722 provides that the basis of a partnership interest acquired by contribution of property, including money, is “the amount of such money and the adjusted basis of such property to the contributing partner at the time of the contribution”. For purposes of section 722, a contribution of money includes “Any increase in a partner’s share of th

Section 722 provides that the basis of a partnership interest acquired by contribution of money or other property to a partnership is the amount of such money, and the adjusted basis of such property, increased by any gain recognized under section 721(b) to the contributing partner at such time. A partner's basis of his partnership interest is subj

Section 722 provides that the basis of a partnership interest acquired by contribution of money or other property to a partnership is the amount of such money, and the adjusted basis of such property, increased by any gain recognized under section 721(b) to the contributing partner at such time. A partner's basis of his partnership interest is subj

Section 722 provides that the basis of a partnership interest acquired by contribution of money or other property to a partnership is the amount of such money, and the adjusted basis of such property, increased by any gain recognized under section 721(b) to the contributing partner at such time. A partner's basis of his partnership interest is subj

Section 722 provides that the basis of a partnership interest acquired by contribution of money or other property to a partnership is the amount of such money, and the adjusted basis of such property, increased by any gain recognized under section 721(b) to the contributing partner at such time. A partner's basis of his partnership interest is subj

172, 341; see also H.R. Rep. No. 97-201, at 243 (1981), as reprinted in 1981-2 C.B. 352, 398. Section 6662(h) was created as a new separate subsection in OBRA 89 § 7721(a), 103 Stat. at 2395. 7 portion of an underpayment of tax required to be shown on a return,” listing subsections any one of which would trigger the umbrella penalt

However, neither party advanced this legal argument, and we will deem it conceded. See Mendes v. Commissioner, 121 T.C. 308, 312–13 (2003) (“If an argument is not pursued on brief, we may conclude that it has been abandoned.”). 10 [*10] The Commissioner has conceded that, as to both the home renovation business (which undertook to im

When calculating their bases each year, section 705(a) provides that partners account for their annual distributive shares of partnership income and/or loss since the partnership began.

§§ 705(a)(2), 733; see also Treas.

- 21 - [*21] basis. They argue that the proper calculation of their outside bases is their guaranteed payments less their 30% shares of the loss. Guaranteed payments do not increase outside bases. A guaranteed payment is a “payment[] to a partner for services” that is “determined without regard to the income of the partnership.”34 Guaran

- 21 - [*21] basis. They argue that the proper calculation of their outside bases is their guaranteed payments less their 30% shares of the loss. Guaranteed payments do not increase outside bases. A guaranteed payment is a “payment[] to a partner for services” that is “determined without regard to the income of the partnership.”34 Guaran

(If the partner recognizes gain on the exchange, his initial outside basis is increased by the amount ofthat gain. W The partner's initial outside basis is adjusted over time to reflect partnership activity. In particular, his outside basis is increased by his share ofpartnership income and decreased by distributions made by the partnersh

The adjusted basis ofa partner's interest in a partnership is determined under section 722 (relating to contributions to a partnership) or section 742 (relating to transfers ofpartnership interests) increased by his distributive share ofpartnership taxable income (plus any exempt income and excess depletion deductions). Sec. 705(a)(1). Th

The adjusted basis ofa partner's interest in a partnership is determined under section 722 (relating to contributions to a partnership) or section 742 (relating to transfers ofpartnership interests) increased by his distributive share ofpartnership taxable income (plus any exempt income and excess depletion deductions). Sec. 705(a)(1). Th

The adjusted basis ofa partner's interest in a partnership is determined under section 722 (relating to contributions to a partnership) or section 742 (relating to transfers ofpartnership interests) increased by his distributive share ofpartnership taxable income (plus any exempt income and excess depletion deductions). Sec. 705(a)(1). Th

Section 752(a) provides that any increase in a partner's share in partnership liabilities shall be treated as a contribution ofmoney by the partner to the partnership, increasing the partner's basis in his partnership interest.

It is increased by any other contributions by the partner to the partnership. Secs. 722, 705(a); William S. McKee, et al., 1 Federal Taxation ofPartnerships and Partners (4th ed. 2007) para. 6.02[1], at 6-5 ("The partner's initial basis for his interest is adjusted by taking into account all subsequent contributions by the partner to the

Likewise, under section 722, American Milling's initial basis in its American Boat partnership interest (outside basis) was equal to its bases in the tugboats before the contribution.

Further, LLCs treated as partnerships may maintain capital accounts, which may be helpful to track partners' economic interests in the LLC. Sec. 1.704-1(b)(2)(iv), Income Tax Regs. Mr. Sun directed Mr. Cheung's foreign companies to send money to Sun Investment, but Sun Investment did not recognize any new members in 2008 or 2009. Mr. Cheu

A decrease in a partner's individual liabilities on account ofthe partnership's assumption ofthem is considered a distribution ofmoney by the entity to the partner, sec. 752(b), which reduces his adjusted basis in his interest in the entity by the amount ofthe deemed distribution, see sec. 733. When WTC contributed the option spread to AD

owned LLC; (cid:16)042 contribute the foreign-currency options and Canadian dollars to the partnership; 5 Inside basis is the basis a partnership has in its own assets, sec. 723; outside basis is the basis a partner has in his partnership interest, sec. 722; sec. 1.722-1, Example (1), Income Tax Regs. 6 We refer elsewhere in this opinion to such options as "long options" and "short options." "Long" can mean several things in finance-speak; here, it simply means to buy and hold a position. "Shor

c. 1.165-1(c), Income Tax Regs.; see also secs. 1.165-7(b)(1), 1.165-8(c), Income Tax Regs. The property at issue is petitioners' investment in GSH. Under section 705 a partner's basis generally is composed ofcontributions to the partnership, s_e_e sec. 722, plus his or her distributive share ofpartnership income, see sec. 703(a), less distributions and his or her distributive share ofpartnership losses or expenditures, see sec. 733; sec. 1.705-1(a)(2), Income Tax Regs. Basis does not include th

Further, LLCs treated as partnerships may maintain capital accounts, which may be helpful to track partners' economic interests in the LLC. Sec. 1.704-1(b)(2)(iv), Income Tax Regs. Mr. Sun directed Mr. Cheung's foreign companies to send money to Sun Investment, but Sun Investment did not recognize any new members in 2008 or 2009. Mr. Cheu

722, "[t]he basis ofan interest in a partnership acquired by a contribution ofproperty * * * to the partnership shall be the * * * adjusted basis of such propertyto the contributing partner at the time ofthe contribution"--thatis, an exchanged basis. Hence, as no taxable gain was recognized at that time, CCFH's tax basis in its partnership int

A decrease in a partner's individual liabilities on account ofthe partnership's assumption ofthem is considered a distribution ofmoney by the entity to the partner, sec. 752(b), which reduces his adjusted basis in his interest in the entity by the amount ofthe deemed distribution, see sec. 733. When WTC contributed the option spread to AD

722, “[t]he basis of an interest in a partnership acquired by a contribution of property * * * to the partnership shall be the * * * adjusted basis of such property to the contributing partner at the time of the contribution”' — that is, an exchanged basis. Hence, as no taxable gain was recognized at that time, CCFH’s tax basis in its partners

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Commissioner, 364 F.2d (continued...) - 32 - [*32] Section 752 deals with the treatment ofcertain liabilities and provides that the assumption ofa partner's liability by the partnership is considered a distribution from the partnership to that partner, while the assumption ofa partnership's liability by a partner is considered a contribution by that partner to the partnership.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

em to the partnership. The taxpayer increases its basis in the partnership by its basis in the contingent asset but does not decrease its basis for the contingent liability.2 After the contingencyperiod for the assets and liabilities expires, 2Under sec. 722 when a party contributes propertyto a partnership in exchange for a partnership interest, the party takes a basis in the partnership interest equal to his or her basis in the contributed property. Under sec. 752 a partner's basis in its part

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege thatunder section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege that under section 722, Sugarloafhad a basis in each trading company equal to the basis it had in the receivables.

Petitioners allege that under section 722, Sugarloaf had a basis in each trading company equal to the basis it had in the receivables.

Commissioner that outside basis isn't at issue here. What is at issue are the partnerships' inside bases. Inside basis is the basis a partnership has in its own assets, sec. 723; outside basis is the basis a partner has in his partnership interest, sec. 722; sec. 1.722-1, Example (1), Income Tax Regs. Ifthe inflated basis in a Son-of-BOSS deal is attached to a partner's interest in a supposed partnership and a loss is realized when he disposes ofthat partnership interest through sale or the par

Gain is also not recognized to a partner on the distribution ofproperty from a partnership to a partner, except to the extent that the distribution exceeds the partner's adjusted basis in the partnership. Sec. 731(a)(1). However, where a distribution is not in liquidation ofa partner's interest in the partnership, the partner's basis in t

Commissioner that outside basis isn't at issue here. What is at issue are the partnerships' inside bases. Inside basis is the basis a partnership has in its own assets, sec. 723; outside basis is the basis a partner has in his partnership interest, sec. 722; sec. 1.722-1, Example (1), Income Tax Regs. Ifthe inflated basis in a Son-of-BOSS deal is attached to a partner's interest in a supposed partnership and a loss is realized when he disposes ofthat partnership interest through sale or the par

Commissioner that outside basis isn't at issue here. What is at issue are the partnerships' inside bases. Inside basis is the basis a partnership has in its own assets, sec. 723; outside basis is the basis a partner has in his partnership interest, sec. 722; sec. 1.722-1, Example (1), Income Tax Regs. Ifthe inflated basis in a Son-of-BOSS deal is attached to a partner's interest in a supposed partnership and a loss is realized when he disposes ofthat partnership interest through sale or the par

services. The fee was arranged throügh the Jerry S. Rawls Business Trust (ESBT). -Mr. Rawls was the sole-grantor; trtistee, and eneficiary ofESBT. See infra pt. ILA. °Outside basis refers to the basis ofa partner s partnership interest. See enerally sec. 722 (providing thafthe basis ofa partner's partnership!interest acquired by the.contribution ofproperty ôther than money is the basïs ofthe contributedproperty; and thebasis*ofa partner's partnership interest acquired by t e contribution ofmoney

t sale as a partnership liability under sec. 752(a) and (b). Thus, Business Trust presumably received an inflated outside basis in Group. See discussion infra p. 22. Outside basis refers to the basis ofa partner's partnership interest. See generally sec. 722 (providing that the basis ofa partner's partnership interest acquired by the contribution ofproperty other than money is the basis ofthe contributed property; and the basis ofa partner's partnership interest acquired by (continued...) - 12 -

In relevant part, section 705(a) provides that the adjusted basis ofa partner's interest in a partnership is his original basis as determined under section 722 (relating to contributions to a partnership) or section 742 (relating to transfers ofpartnership interests) increased by (1) the amount of money and his basis in property subsequently contributed to the partnership and (2) his distributable share ofthe income ofthe partnership and decreased (but not below zero) by (1) the amount ofmoney

In relevant part, section 705(a) provides that the adjusted basis of a partner’s interest in a partnership is his original basis as determined under section 722 (relating to contributions to a partnership) or section 742 (relating to transfers of partnership interests) increased by (1) the amount of money and his basis in property subsequently contributed to the partnership and (2) his distributable share of the income of the partnership and decreased (but not below zero) by (1) the amount of m

rvices. The fee was arranged through the Jerry S. Rawls Business Trust (ESBT). Mr. Rawls was the sole grantor, trustee, and beneficiary of ESBT. See infra pt. II.A. Outside basis refers to the basis of a partner’s partnership interest. See generally sec. 722 (providing that the basis of a partner’s partnership interest acquired by the contribution of property other than money is the basis of the contributed property; and the basis of a partner’s partnership interest acquired by the contribution

Section 752(a) provides: SEC. 752(a). Increase in Partner's Liabilities.-- Any increase in a partner's share of the liabilities of a partnership, or any increase in a partner's individ- ual liabilities by reason of the assumption by such partner of partnership liabilities, shall be considered - 25 - as a contribution of money by such par

at 264-265.] Finding the plain language of the statute to be "dispositive", we held that a.foreign currency option does not fall within the meaning of a "foreign currency contract" under section 1256(g) (2).

inc ude a $131.80 section 6653 (a) (1) 5- percent negligence penalty sfor underpaying her 1983 tax.6 Bang had already paid these amounts. At the Appeals Office, Bang was 4Former sec. 6653(a) (2) (as amended by the Economic Recovery Ta'x Act of 1981, sec. 722(b) (1), Pub. L. =97-34, 95 Stat. 342) provided that if any underpayment of tax was attributable to negligenci, theêe would be an addition to tax equal to 50 percent of the interest payable under sec. 6601 on the portion of the underpayment'd

Following Summitt and Garcia, we hold that Cyber Advice's major foreign currency option was not a "foreign currency contract" as defined in section 1256(g) (2).

In addition, the partnership's basis in the contributed property generally is a substitute basis that equals the partner's adjusted basis in that property at the time of contribution. Sec. 723. -33- These general rules do not apply, however, where, as here, the facts establish that one or more of the r levant transactions is not in subst

urchase the foreign currency or stock with a profit motive for purposes of sectio n 165(c) (2) ; 5 ., even if the foreign currency options are treated .as having been contributed to Tigers Eye, the amount treated as contributed by the partners under section 722 with respect to the purchased options is reduced by the amounts received by the contributing partners from the contemporaneous sales ofthe sold options to the same counterparty, thus reducing the basis of the contributed options in the ha

It is determined that, even if the foreign currency option( s) are treated as having beep contributed to AD FXi1 Trading 2000 Fund, LLC, the amount treated as contributedl!by, the partners under section 722 of the Internal Revenue Code is reduced by the amounts received !by the contributing partners from the contemporaneous sales of the call option ( s) to the same counter-party Thus, the basis of the,' contributed option ( s) is reduced, both in the hands .

the new partnership in exchange for a partnership interest .39 Under section 722, AHI's basis in its ,Palm-Canyon partnership interest equaled its basis in-the assets that it was deemed to contribute to the newly created' partnership .40 Consequently, AHI claimed an initial $5,825,000 basis in its Palm Canyon partrier`ship interest, which included the original $825,000 contributed by Mr .

It is determined that, even if the positions on market- linked deposits are treated as having been contributed to LKF Investments, L.L .C ., the amount treated as contributed by the partners under § 722 of the Internal Revenue Code is reduced by the amounts received by the contributing partner(s) from the contemporaneous sales of the offsetting position to the same counter-party .

The Manroes took the position that the obligation to cover the short sale was not a liability for purposes of section 752(b). Mr. Manroe claims that when the partnership redeemed his partnership interest, he recognized no gain or loss because the money distributed did not exceed his basis in the partnership. See sec. 731(a). He claims tha

It is determined that, even if the foreign currency option(s) are treated as having been contributed to New Millennium Trading, L .L .C ., the amount treated as contributed by the partners under section 722 of the Internal Revenue Code is reduced by the amounts received by the contributing partners from the contemporaneous sales of the call option(s) to the same counter-party .

It is determined that, even if the foreign currency option(s) are treated as having been contributed to New Millennium Trading, L.L.C., the amount treated as contributed by the partners under section 722 of the Internal Revenue Code is reduced by the amounts received by the contributing partners from the contemporaneous sales of the call option(s) to the same counter-party.

It is determined that, even if the foreign currency option(s) are treated as having been contributed to Petaluma FX Partners, LLC, the amount treated as contributed by the partners under section 722 of the Internal Revenue Code is reduced by the amounts received by the contributing partners from the contemporaneous sales of the call option(s) to the same counter-party.

1.722-1, Example (1), Income Tax Regs. Outside basis increases when a partner contributes additional assets to the partnership or when the partnership has a gain; it decreases when the partner contributes liabilities to the partnership, the partnership has a loss, or the partnership distributes assets to the partner. Sec. 705(a). Whe

It is determined that, even if the foreign currency option(s) are treated as having been contributed to Evergreen Trading, LLC, the amount treated as contributed by the partners under section 722 of the Internal Revenue Code is reduced by the amounts received by the contributing partners from the contemporaneous sales of the call option(s) to the same counter-party.

1.722-1, Example (1), Income Tax Regs. Outside basis increases when a partner contributes additional assets to the partnership or when the partnership has a gain; it decreases when the partner contributes liabilities to the partnership, the partnership has a loss, or the partnership distributes assets to the partner. Sec. 705(a). Whe

- 122 - A partner’s adjusted basis in the partner’s interest in the partnership is the basis of such interest determined under section 722, increased by the partner’s distributive share of income and decreased by the partner’s distributive share of loss and applicable expenditures.

A partner’s adjusted basis in his partnership interest is generally the basis of such interest determined under section 722, increased or decreased by the partner’s distributive share of income, loss, and certain other items.

As relevant here, the partner's adjusted basis in the partnership interest is the basis of such interest determined under section 722, increased or decreased by the partner's distributive share of income, loss, and applicable expenditures.

722.3 (West 2002); Wiersma v. Wiersma, 217 N.W. 767, 768 (Mich. 1928); Ballard v. Ballard, 198 N.W.2d 451, 452 (Mich. Ct. App. 1972). Petitioner argues that he paid a total of $41,244 as purported child support pursuant to the private agreement, but that the Circuit Court characterized only $6,892 of the total payments as tantamount to child s

722(a), 95 Stat. 341; OBRA 1989 sec. 7721, 103 Stat. 2395. We note that, where a valuation overstatement on a return filed after Dec. 31, 1981, gives rise to an underpayment for a year prior to 1981 by operation of a carryback, then that underpayment is attributable to the overstatement on the return filed in the later year, and sec. 6659 is a

722(a), 95 Stat. 341; OBRA sec. 7721, 103 Stat. 2395. - 14 - an underpayment for a taxable year that is attributable to valuation overstatements is $1,000 or greater. Sec. 6659(d). The amount of the addition to tax varies depending upon the size of the discrepancy in the valuation. Sec. 6659(b). The Secretary has the discretion to waive the s

722(a), 95 Stat. 341; OBRA sec. 7721, 103 Stat. 2395. - 14 - an underpayment for a taxable year that is attributable to valuation overstatements is $1,000 or greater. Sec. 6659(d). The amount of the addition to tax varies depending upon the size of the discrepancy in the valuation. Sec. 6659(b). The Secretary has the discretion to waive the s

94 2,143 450 -–- - 2 - After concessions,1 the issues for our consideration are: (1) Whether petitioner is entitled to any Schedule A itemized deductions for the taxable years 1993 and 1994; (2) whether petitioner is liable for additional tax under section 722 in 1993 and 1994 for premature distributions of $35,000 and $8,717.32, respectively, from individual retirement accounts; and (3) whether petitioner is liable for additions to tax under section 6651(a) for 1993 and 1994 or under section 66

Thus, the determination of whether we have jurisdiction over any portion of the assessed addition to tax turns on whether a deficiency within the meaning of section 6211 exists in this case.

The carryover-basis rules contained in section 722, which provide that a partner’s basis in his partnership interest equals the amount of money plus the adjusted basis of property contributed to a partnership, generally results in a matching of inside and outside bases upon the formation of a partnership.

The partner's basis in the partnership is then adjusted upward for the partner's distributive share of separately stated income items, and downward by distributions of money (including the relinquishment of liabilities) or the adjusted basis of other property distributed, and the partner's distributive share of losses and nondeductible ex