Dennis L. and Sharon E. Hayden - Page 8

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          (10th Cir. 1989)) or other excise taxes (Young v. Riddell, 283               
          F.2d 909 (9th Cir. 1960)).                                                   
               Equally important, the terms such as "taxpayer" and                     
          "partnership" have certain elastic applications within the                   
          Internal Revenue Code.  While a partnership generally is not                 
          subject to income taxes, concepts such as taxable income are                 
          fully applicable.  Section 703(a) provides that with exceptions              
          "The taxable income of a partnership shall be computed in the                
          same manner as in the case of an individual".  In United States              
          v. Basye, 410 U.S. 441, 448 (1973), the Supreme Court noted for              
          the purpose of computing taxable income that "the partnership is             
          regarded as an independently recognizable entity apart from the              
          aggregate of its partners."                                                  
               There are many examples of the term "partnership" being used            
          in place of the word "taxpayer" or other similar designations.               
          Section 446(a) provides:  "Taxable income shall be computed under            
          the method of accounting on the basis of which the taxpayer                  
          regularly computes his income in keeping his books."  (Emphasis              
          added.)  For purposes of section 446, however, the "taxpayer" is             
          the partnership.  See Resnik v. Commissioner, 66 T.C. 74, 80                 
          (1976), affd. per curiam 555 F.2d 634 (7th Cir. 1977).  Section              
          1033(a)(2)(A) provides that "at the election of the taxpayer" a              
          gain may not be recognized.  (Emphasis added.)  For section 1033             
          purposes, when a partnership is involved, the taxpayer is the                
          partnership.  See Demirjian v. Commissioner, 457 F.2d 1, 5 (3d               
          Cir. 1972), affg. 54 T.C. 1691 (1970).  Section 183(a) (regarding            

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