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termination of the partnership.” This alternative rule may be
used in circumstances where a partner cannot practicably apply
the general rule set forth in section 705(a) and section 1.705-
1(a), Income Tax Regs., or where, from a consideration of all the
facts, the Commissioner reasonably concludes that the result will
not vary substantially from the result obtainable under the
general rule. Sec. 1.705-1(b), Income Tax Regs. Where the
alternative rule is used, certain adjustments may be necessary in
order to ensure the proper determination of the adjusted basis of
a partner’s interest in a partnership. Id.
In the instant case, BBP was formed in 1943. The records of
the partnership do not show the amount of cash contributions, or
the basis in property contributed by Melvin or Russell to BBP.
Additionally, a calculation of the distributions made to each
partner cannot be made. The partnership tax returns in the
record cover only the years 1980 through 1994. Under these
circumstances, it is appropriate for respondent to apply the
alternative rule set forth in section 1.705-1(b), Income Tax
Regs., in order to attempt to establish Russell’s adjusted basis
in his 50-percent partnership interest.
Respondent points out that BBP reported that the total
assets and total liabilities of the partnership at both the
beginning and the end of the taxable year 1994 were “None”.
Additionally, respondent notes that BBP’s 1994 return reported
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