Contribution of a Built-In Loss to a Partnership

Abstract:     
In 2004, Congress amended the Code to prevent the use of a partnership entity as a means of transferring the potential deduction for a built-in loss from one person to another. The amendment was poorly designed in such manner that it often distorts the reporting of taxable income. Moreover, the amendment has undermined the application of the remedial method and the traditional method with curative allocations to a contribution of a built-in loss.

Number of Pages in PDF File: 8

Keywords: built-in loss, partnership taxation, contributing partner, contributed property, remedial method

JEL Classification: K34

Accepted Paper Series