A Technical Analysis of Proposed Section 710
20 Pages Posted: 22 Nov 2007 Last revised: 19 Jun 2012
In general, a partner's distributive share takes its characterization from the activities of the venture. Proposed section 710 will rechararterize as compensation the distributive share of any partner who contributes services to the partnership. It also recharacterizes as a sale certain distributions of property to a service partner. This paper examines proposed section 710 in detail and concludes that it is poorly conceived and inappropriately implemented.
JEL Classification: law, tax, partnership tax
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