P.D.B. Sports, Ltd., Bowlen Sports, Inc., Tax Matters Partner - Page 14

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               paragraph (b) of section 1.743-1.[9]  [Citations                       
               omitted.]                                                              
               Upon a distribution of partnership property, each partner’s            
          basis in his partnership interest is allocated among the                    
          distributed assets in proportion to the assets' respective bases            
          to the partnership.  Sec. 732(b) and (c).  The partnership's                
          bases in its assets may be adjusted under section 743(b) before             
          the partnership distribution to reflect changes in the fair                 
          market value of partnership property in relation to the                     
          partnership's adjusted bases in the assets.  The partnership’s              
          basis, after being adjusted in accord with section 743(b), is               
          then used to allocate basis among the distributed assets.  Upon             
          recontribution of the property to the new partnership, the                  
          partnership takes the partner's basis in the property at the time           
          of contribution.  Sec. 723.                                                 
               In this case, a section 708(b) constructive termination                
          would have occurred due to the sale of more than a 50-percent               
          partnership interest.  The assets of Bowlen I, including the                
          Broncos franchise and professional football player contracts,               
          would be deemed to have been distributed to Bowlen and Adams and            
          recontributed to a new partnership.  Sec. 1.708-1(b)(1)(iv),                

               9 Sec. 1.708-1(b)(iv), Income Tax Regs., was amended by T.D.           
          8717, 1997-24 I.R.B. 5 (May 8, 1997), to apply to sec. 708                  
          terminations occurring after May 8, 1996.  The amended regulation           
          would not apply in this case.  The changes may cause a result               
          different than the one dictated by the regulations in existence             
          for the 1984 taxable year, the year in which a sale of a 50-                
          percent interest in Bowlen I occurred.                                      




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