A History and Analysis of the Co-Ownership-Partnership Question
29 Pages Posted: 30 Aug 2006
The use of interests in syndicated tenancy-in-common arrangements as replacement property for section 1031 exchanges attaches new significance to the question of when a co-ownership arrangement should be treated as partnership for federal tax purposes (the co-ownership-partnership question). This Article examines the history of partnership taxation and the authority that addresses the co-ownership-partnership question. The examination reveals that there is considerable confusion in this area, including an ambiguous overlap between the check-the-box rules and the rules governing when a partnership can elect out of subchapter K. Finally, the Article recommends that the IRS provide guidance that will more clearly define the term separate entity in the section 7701 regulations.
Keywords: partnership taxation, tax partnership, check-the-box regulations
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