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most favorable to the party opposing the motion. Blanton
v. Commissioner, 94 T.C. 491, 494 (1990).
At the outset, we note that petitioners do not take
the position that an adjustment involving a constructive
distribution of money pursuant to section 752(b), based
upon a decrease in a partner’s share of partnership
liabilities, can never, as a matter of law, be a
partnership item within the meaning of section 6231(a)(3).
Rather, petitioners argue that the adjustments determined
in these cases, as described in the RAR, cannot be
partnership items.
In order to analyze petitioners’ argument, it is
necessary to review the definition of a partnership item.
Section 6231(a)(3) defines a "partnership item" as follows:
The term "partnership item" means, with respect
to a partnership, any item required to be taken
into account for the partnership's taxable year
under any provision of subtitle A to the extent
regulations prescribed by the Secretary provide
that, for purposes of this subtitle, such item is
more appropriately determined at the partnership
level than at the partner level.
The regulations promulgated under section 6231(a)(3)
make clear that the determination of a partner’s share of
partnership liabilities is a partnership item. Section
301.6231(a)(3)-1(a), Proced. & Admin. Regs., provides as
follows:
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