Download this Paper Open PDF in Browser

Sales Between a Partnership and Non-Partners

7 Pages Posted: 21 Aug 2012  

Douglas A. Kahn

University of Michigan Law School

Date Written: August 20, 2012


Section 267(a)(1) denies a deduction for losses recognized on sales between certain related parties. With one minor exception, that provision does not apply to sales between a partnership and another person. Nevertheless, Reg. 1.267(b-1(b) applies that provision to deny part or all of a loss recognized on a sale between a partnership and a person who is not a partner but who has constructive ownership of a partnership interest. The author maintains that an amendment made to another provision of the Code (section 707(b)) in 1986 invalidated that part of the regulation under section 267. The author also maintains that the 1986 amendment invalidated parts of temp. reg. 1.267(a)-2T(c).

Keywords: partnership, non-partner, sales, related parties, regulation

JEL Classification: K1, K2, L5

Suggested Citation

Kahn, Douglas A., Sales Between a Partnership and Non-Partners (August 20, 2012). Tax Notes, Vol. 136, p. 827, August 2012; U of Michigan Law & Econ Research Paper No. 12-016. Available at SSRN:

Douglas Kahn (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4043 (Phone)

Paper statistics

Abstract Views