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integration would present numerous choices and policy decisions
that the statute, legislative history, and respondent have failed
to address.
Section 1060 provides an example of the integration of basis
rules into subchapter K. Section 1060 was enacted in 1986
subsequent to the transaction in question and is inapplicable in
this case.13 Nevertheless, the enactment of section 1060
provides an example of the complexity and difficulties involved
in a section 1056 integration into partnership transactions.
Sections 1056 and 1060 each control the allocation of
purchase price to individual assets, albeit by different means.
Section 1060 requires the seller and buyer in certain prescribed
asset sales to allocate the purchase price among acquired assets
using the residual allocation method. Under that method, a
taxpayer generally allocates the purchase price among acquired
assets to the extent of their fair market values in descending
order of priority starting with cash and tangible and intangible
assets other than goodwill and going concern value. Sec.
1060(a); sec. 1.1060-1T(a)(1), (d), Temporary Income Tax Regs.,
53 Fed. Reg. 27039, 27040 (July 18, 1988). The residual of the
purchase price is then allocated to goodwill and going concern
value. Sec. 1.1060-1T(d), Temporary Income Tax Regs., 53 Fed.
13 Sec. 1060, enacted by sec. 641(a) of the Tax Reform Act
of 1986, Pub. L. 99-514, 100 Stat. 2282, applies to asset
acquisitions after May 6, 1986, unless entered under a binding
contract in effect on that date and at all times thereafter.
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