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tax items, a partner in bankruptcy and his bankruptcy estate are
properly considered as one and the same.
ii. Is the Allocation of a Partner’s Distributive
Share Between the Partner and His Bankruptcy
Estate a Determination That Should Be Made at
the Partnership Level?
The TEFRA provisions and the accompanying legislative
history reflect a desire on the part of Congress to have only
those items that are more appropriately determined at the
partnership level constitute the subject of a partnership-level
proceeding. See secs. 6221, 6231(a)(3); H. Conf. Rept. 97-760,
at 600 (1982), 1982-2 C.B. 600, 662. The determination of the
manner in which items of income, gain, loss, deduction, and
credit are allocated among the various partners in a partnership
is one best made at the partnership level, because the allocation
to one partner necessarily affects the allocation to another.
Not surprisingly, the partnership must provide the distributive
shares of each of its partners in its information tax return.
See Schedule K-1 to Form 1065, U.S. Partnership Return of Income.
Yet once the partnership has determined the distributive share of
a partner who happens to be in bankruptcy, there exists no
statutory obligation upon the partnership to subdivide the
distributive share between such partner and his bankruptcy
estate.9 This stands to reason, as such a suballocation will
9 This fact will be illustrated in our discussion infra of
the merits of the allocation of the prepetition partnership
losses as between Mr. Katz and his bankruptcy estate.
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