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partnership's player contracts is limited to the presale basis in
the contracts.
Respondent argues that section 1056 would limit the
amortizable basis of the partnership's player contracts in this
case. Respondent, however, does not discuss or explain how or if
the section 1056 limitation would otherwise affect partnership
provisions, including sections 732(d), 743(b) and/or 754 which
may have been considered or have been in play in the transaction
under consideration. Respondent does not explain whether section
1056 would preempt the application of other basis requirements
and/or elections under subchapter K or whether it would be
integrated in some manner. These unanswered questions are
problematic and complicate our proper analysis of respondent's
determination. Additionally, no regulations have been issued
under section 1056, although, in the 1976 legislation, respondent
was statutorily mandated to issue regulations.
In the alternative, if we decide that the partnership
provisions of subchapter K apply to the exclusion of section
1056, respondent argues that the partnership incorrectly computed
its basis in the player contracts, and, as a result, no player
contract bases remain to be amortized.
II. Section 1056--Does It Apply to Partnership Transactions?
Section 1056 applies to a "sale or exchange" of a sports
franchise. In this case, the sports franchise was held in
partnership form so that any sale or exchange of a sports
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