Allocations Made in Accordance with Partners' Interests in the Partnership
Bradley T. Borden
Brooklyn Law School
December 1, 2009
Business Entities, Vol. 11, p. 4, November/December 2009
Tax law allocates partnership tax items in accordance with the partners' interests in the partnership if the allocations do not have substantial economic effect. Tax law also uses the partners' interests in the partnership to test whether certain allocations satisfy the test for substantiality. These rules that rely upon partners' interests in a partnership are at the heart of partnership taxation. Nonetheless, tax law does a poor job of defining partners' interests in a partnership. This article illustrates the problems that arise because of that inadequate definition. It also recommends a few changes that could help remedy the existing shortcomings.
Number of Pages in PDF File: 30
Keywords: partners' interests in the partnership, tax partnerships, partnership tax allocations
JEL Classification: D20, D21,D23, E62, H25, H26, H60, K34, M41Accepted Paper Series
Date posted: December 4, 2009
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