Partnership Special Allocations Revisited

David Hasen

University of Colorado School of Law

August 11, 2012

13 Florida Tax Review 349 (2012)

Special allocations of items of partnership income, gain, loss, and deduction have long created difficulties for the tax law. The paper argues that most such allocations should not be respected for tax purposes because they inappropriately separate the character of partnership items from the partners that are economically entitled to them. The paper suggests that special allocations instead ought to be viewed as transactions in partnership interests between or among the partners themselves. A number of consequences follow. The paper also argues that Treasury's rules for establishing the partners' interests in the partnership when an allocation fails the test for substantiality likely are inconsistent with section 704(b) of the Internal Revenue Code.

Number of Pages in PDF File: 53

Keywords: taxation, partnerships

JEL Classification: H25, K34

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Date posted: August 12, 2012 ; Last revised: January 10, 2013

Suggested Citation

Hasen, David, Partnership Special Allocations Revisited (August 11, 2012). 13 Florida Tax Review 349 (2012). Available at SSRN: http://ssrn.com/abstract=2128217 or http://dx.doi.org/10.2139/ssrn.2128217

Contact Information

David Hasen (Contact Author)
University of Colorado School of Law ( email )
401 UCB
Boulder, CO 80309
United States
303-492-9684 (Phone)
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