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preparation and filing of the Pecaris partnership return, there
is no evidence that they actually agreed to an amendment to the
Pecaris partnership agreement. Petitioners' argument that there
was a de facto amendment is belied by the way that Pecaris
reported the transaction on its 1988 partnership return.16
Petitioners argue that the definitions of partnership
agreement and amendment of the partnership agreement are much
more expansive, for the purpose of determining distributive
shares of gain under section 704(b), than they are under section
761. Compare sec. 1.761-1(c), Income Tax Regs., with sec. 1.704-
1 (b)(2)(ii)(h), Income Tax Regs. The regulation under section
704(b) states:
Partnership agreement defined. For purposes of
this paragraph, the partnership agreement includes all
agreements among the partners, or between one or more
partners and the partnership, concerning affairs of the
partnership and responsibilities of partners, whether
oral or written, and whether or not embodied in a
document referred to by the partners as the partnership
agreement. * * * [Sec. 1.704-1(b)(2)(ii)(h), Income
Tax Regs.]
Be that as it may, petitioners have not persuaded us that the
construction they wish to put on the transaction was reflected in
16Mr. Spillas testified that he learned of petitioner's
participation in Coastal before the Pecaris return was prepared,
and that he thought that petitioner had some contact with
Pecaris' accountant regarding "some modification," but did not
know for certain whether petitioner and the Pecaris return
preparer discussed modifying the Pecaris agreement. Mr. Spillas
testified that he instructed the Pecaris return preparer to do
what was necessary for the partnership to effectuate a correct
filing.
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