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conceded that the payment constitutes a guaranteed payment,
because respondent did not raise any argument on brief as to the
nature of the payment, we consider the issue conceded.
Turning to the question of the time at which the $190,000
guaranteed payment is properly includable in petitioners’ income,
we look to the provisions of section 706(a) and section 1.707-
1(c), Income Tax Regs. Section 706(a) provides:
(a) YEAR IN WHICH PARTNERSHIP INCOME IS
INCLUDIBLE--In computing the taxable income of a
partner for a taxable year, the inclusions required by
section 702 and 707(c) with respect to a partnership
shall be based on the income, gain, loss, deduction, or
credit of the partnership for any taxable year of the
partnership ending within or with the taxable year of
the partner.
The relevant portion of section 1.707-1(c), Income Tax Regs.,
provides:
(c) Guaranteed Payments. Payments made by a
partnership to a partner for services or for the use of
capital are considered as made to a person who is not a
partner, to the extent such payments are determined
without regard to the income of the partnership.
However, a partner must include such payments as
ordinary income for his taxable year within or with
which ends the partnership taxable year in which the
partnership deducted such payments as paid or accrued
under its method of accounting. * * *
The tax accounting treatment of a guaranteed payment is
determined at the partnership level regardless of the partner’s
method of accounting. Pratt v. Commissioner, 64 T.C. 203, 212-
214 (1975) (and cases cited therein), affd. in part and revd. in
part on another issue 550 F.2d 1023 (5th Cir. 1977); Cagle v.
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