- 10 - Petitioner acknowledges that none of the cases he cites involves a partnership. Instead he argues that, because partnership taxable income is computed in the same manner as that of an individual, the existence of a partnership does not matter. Petitioner argues that the combination of section 703(a) and the cited cases leads to the conclusion that a taxpayer does not have income if there are restrictions on its receipt. We disagree with petitioner’s argument for several reasons, the first of which is that the cases petitioner cites do not involve partnerships or partners’ distributive shares. Cohen & Burke was a partnership, and, therefore, the cases petitioner cites do not apply. Secondly, section 703 describes how partnership income is computed;3 i.e., how taxable income is calculated from gross 3 SEC. 703(a). Income and Deductions.--The taxable income of a partnership shall be computed in the same manner as in the case of an individual except that-- (1) the items described in section 702(a) shall be separately stated, and (2) the following deductions shall not be allowed to the partnership: (A) the deductions for personal exemptions provided in section 151, (B) the deduction for taxes provided in section 164(a) with respect to taxes, described in section 901, paid or accrued to foreign countries and to possessions of the United States, (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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