9
the regulation at issue is explicit in defining precisely
what partnership items are to be considered in making such a
determination. * * * (i) Items of income, gain, loss,
deduction, or credit of the partnership; (ii) Expenditures
by the partnership not deductible in computing its taxable
income (for example, charitable contributions); (iii) Items
of the partnership which may be tax preference items under
section 57(a) for any partner; [and] (iv) Income of the
partnership exempt from tax; Thus, in defining same share
the regulation disregarded as a partnership item under
section 301.6231(a)(3)-1(a), Proced. & Admin. Regs.,
partnership liabilities; other amounts determinable at the
partnership level with respect to partnership assets,
investments, transactions and operations; guaranteed
payments; optional adjustments to basis of partnership
property pursuant to an election under section 754; and
items relating to contributions to the partnership,
distributions from the partnership, and transactions to
which section 707(a) applies to the extent that it is
determined that the partnership is under an obligation.
Sec. 301.6231(a)(3)-1(a)(1)(v) through (4), Proced. & Admin.
Regs. [Emphasis added.]
McKnight v. Commissioner, 99 T.C. at 184-185.
We stated that the small partnership exception to the TEFRA
provisions "sought to establish that the partnerships which would
realize such exception were those whose members 'treat themselves
as co-ownerships rather than partnerships, as each co-owner
resolves his own tax responsibilities separately as an individual
with the IRS.'" Id. at 185 (quoting Tax Compliance Act of 1982
and Related Legislation: Hearings on H.R. 6300 Before the House
Committee on Ways and Means, 97th Cong., 2d Sess. 259-261
(1982)). Thus, the intent of Congress in establishing the same
share rule of section 6231(a)(1)(B)(i)(II) was to ensure that
only "simple" partnerships would be excepted from the TEFRA
provisions.
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