- 12 -
and had no assets after the Encino Park foreclosure,2 and had no
partners after Schlesinger and petitioner filed their petitions
in bankruptcy. We disagree.
A partnership terminates for tax purposes when no part of
any business, financial operation, or venture of the partnership
is carried on by any of its partners in a partnership. See sec.
708(b)(1)(A).3 For purposes of section 708(b)(1)(A), the date of
termination is the date on which the winding up of a
partnership’s affairs is completed. See sec. 1.708-
1(b)(1)(iii)(a), Income Tax Regs. Winding up is not defined in
the Code or regulations.
Petitioners point out that the GSD partnership agreement
states that GSD terminates upon the bankruptcy of the general
partner. See supra note 1. Petitioners also point out that,
under Texas law, a person ceases to be a general partner in a
2 GSD’s partnership returns showed assets of $1,474 for
1988, and $1 for 1989, 1990, and 1991.
3 Sec. 708(b) provides:
SEC. 708(b). Termination.–-(1) General rule. For purposes
of subsection (a), a partnership shall be considered as
terminated only if–-
(A) no part of any business, financial operation, or
venture of the partnership continues to be carried on by any
of its partners in a partnership, or
(B) within a 12-month period there is a sale or
exchange of 50 percent or more of the total interest in
partnership capital and profits.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011