§733 — Basis of distributee partner’s interest

We disagree with respondent.

In relevant part, section 705(a) provides that the adjusted basis of a partner's interest in a par:nership is the basis determined under section 722 (1) increased by the partner's distributive share of partnership income for the tax year and prior years and (2) decreased (but not below zero) by distributions from the - 43 - par:nership under section 733 and by his distributive share of partnership losses for the tax year and prior years.

In relevant part, section 705(a) provides that the adjusted basis of a partner’s interest in a partnership is the basis determined under section 722 (1) increased by the partner’s distributive share of partnership income for the tax year and prior years and (2) decreased (but not below zero) by distributions from the - 43 - partnership under section 733 and by his distributive share of partnership losses for the tax year and prior years.

We refer to provisions of the Florida Probate Code as “Florida Probate Code § ___.” All provisions of the Florida Statutes (including provisions of the 8 [*8] The powers granted to a personal representative are specified by Florida Probate Code § 733.612(20), which provides that a “personal representative .

733.808(1) (West 2010). Ifno proper claim was made on the IRA ¹²This amount was for all intents and purposes the entire amount ofMr. Ozimkoski, Sr.'s IRA. According to emails between Wachovia's employees, a small amount of"loose cash" not included in the July 2, 2008, transfer was also transferred to petitioner's IRA. ¹³The Court posits petiti

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 ADG, it took the position that its basis in its ADG interest was equal to the cost ofthe long option it contributed ($2,500,000). WTC (and the other corporations) disregarded the short-option liabil

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 the value ofservices performed unless and until the value ofthose services has been subjected to tax. See Hutcheson v. Commissioner, 17 T.C. 14, 19 (1951) (explaining that a deduct

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 ADG, it took the position that its basis in its ADG interest was equal to the cost ofthe long option it contributed ($2,500,000). WTC (and the other corporations) disregarded the short-option liabil

The partner’s capital account also decreases by the amount of the deemed distribution. Sec. 1.704-l(b)(2)(iv)(6)(4), Income Tax Regs. Of course, if a partnership were to assume a partner’s obligation that did not qualify as a “liability” for purposes of sec. 752, as was intended here, then the downward adjustments of outside basis and

Section 1.707-1(a), Income Tax Regs., provides that [a] partner who engages in a transaction with a partnership other than in his capacity as a partner shall be treated as ifhe were not a member ofthe partnership with respect to such transaction.

e basis on the basis ofhis distributive share ofvarious tax attributes ofthe partnership. Sec. 705. In addition, any liquidating or nonliquidating distribution would also affect the partner's adjusted basis in his partnership interest. See generally sec. 733. Aside from the unsigned partnership return for Nexes for 2004 and some scattered documents relating to Nexes that are irrelevant to our inquiries under sections 705 and 733, petitioners did not introduce anything into evidence, not even Sch

er's partnership interest, following its.initial determination at the time oforiginal acquisition to reflect the partner(cid:0)541hipo'speratiiig results and the partner's distributive shares of partnership income, gain, loss, deduction and credit); sec. 733 (providing rules for adjustments to the basis ofa partner's partnership interest to account for distributions from the partnership to thepartner). -9- lower tier partnership. The notion was to impute this inflated outside basis to the assets

ofapartner's partnership interest, following its initial determination at the time oforiginal acquisition, to reflect the partnership's operating results and the partner's distributive shares of partnership income, gain, loss, deduction and credit); sec. 733 (providing rules for adjustments to the basis ofa partner's partnership interest to account for distributions from the partnership to the partner). " Family, presumablyunder authority ofsec. 723, inherited Business Trust's inflated outside b

artner's outside basis to ascertain the sec. 734(b) adjustment. S.ee generally sec. 731 (governing distributee partner's recognition ofgain or loss); sec. 732 (providing rules for determining distributee partner's basis in the distributed property); sec. 733 (specifying adjustments to distributee partner's outside basis). As with sec. 743(b) adjustments, basis adjustments under sec. 734(b) are now no longer entirely elective. Effective for distributions after October 22, 2004, adjustments to the

733.702(1) (West 2010) provides, in part-- no claim or demand against the decedent's estate that arose before the death ofthe decedent, including claims ofthe state and any ofits political subdivisions, even ifthe claims are unmatured, contingent, or unliquidated; no claim for funeral or burial expenses; no claim for personal property in the p

artner’s outside basis to ascertain the sec. 734(b) adjustment. See generally sec. 731 (governing distributee partner’s recognition of gain or loss); sec. 732 (providing rules for determining distributee partner’s basis in the distributed property); sec. 733 (specifying adjustments to distributee partner’s outside basis). As with sec. 743(b) adjustments, basis adjustments under sec. 734(b) are now no longer entirely elective. Effective for distributions after October 22, 2004, adjustments to the

partner’s partnership interest, following its initial determination at the time of original acquisition, to reflect the partnership’s operating results and the partner’s distributive shares of partnership income, gain, loss, deduction, and credit); sec. 733 (providing rules for adjustments to the basis of a partner’s partnership interest to account for distributions from the partnership to the partner). Inside basis refers to the partnership’s basis in partnership property. See generally sec. 72

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

IP. The FPAA, for example, determined that the short sale obligation was a liability under sec. 752. Respondent also determined in the FPAA that DIP’S partners received constructive distributions of cash that reduced their outside bases in DIP under sec. 733(1) when their shares of the short sale liability was reduced. See also secs. 705(a)(2), 752(b). Both partnership liabilities and partnership distributions are partnership items within the meaning of sec. 6231(a)(3). See sec. 301.6231(a)(3)-l

Additionally, any decrease in a partner’s share of the liabilities of a partnership is considered a distribution of money to the partner by the partnership. Sec. 752(b). - 26 - Section 705(b) grants the Secretary the authority to prescribe regulations under which the adjusted basis of a partner’s interest in a partnership may be determin

733.12 (West 1964) (repealed 1974). Statutory dower was originally “free from all liability for the debts of the decedent and all costs, charges and expenses of administration”. 1933 Fla. Laws ch. 16103, sec. 35. However, it was modified in 1939 7 Our analysis of Florida statutory dower refers to the 1964 version, which was contemporaneous wit

733.604(1) (West 1988). Kaltenbach prepared an inventory based on information from Mrs. Pert and a friend of hers whom Kaltenbach knew and trusted. He intended to include only property that was owned solely by Mr. Riffe and not to include jointly owned property. He listed the following property in the inventory: - 10 - Estimated Fair Assets M