Abstract

http://ssrn.com/abstract=1374125
 


 



Now You See it, Now You Don't: Exiting a Partnership and Making Gain Disappear


Howard Abrams


Emory University School of Law

April 7, 2009

Emory Public Law Research Paper No. 9-58

Abstract:     
In this Article, three methods of exiting are partnership are examined. Each exit strategy offers significant tax advantages to the nonexiting partners. In two of the exit strategies, well-known defects in Subchapter K are exploited, and I conclude that the strategies cannot be attacked successfully by the government using either the detailed rules of Subchapter K or by resort to the partnership anti-abuse rules. However, the third of the exit strategies seeks to exploit language in a treasury regulation in a manner plainly not contemplated by the drafters and which yields a result inconsistent with the structure of subchapter K. I conclude that this exit strategy can be attacked successfully by the government. The two successful strategies show that in many cases the exit of a partner can be used to defer significant amounts of income.

Number of Pages in PDF File: 16

Keywords: taxation, partnership taxation, federal income tax

JEL Classification: H20, H25, K34

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Date posted: April 7, 2009  

Suggested Citation

Abrams, Howard, Now You See it, Now You Don't: Exiting a Partnership and Making Gain Disappear (April 7, 2009). Emory Public Law Research Paper No. 9-58. Available at SSRN: http://ssrn.com/abstract=1374125 or http://dx.doi.org/10.2139/ssrn.1374125

Contact Information

Howard E. Abrams (Contact Author)
Emory University School of Law ( email )
1301 Clifton Road
Atlanta, GA 30322
United States
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