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share of partnership liabilities); see also Tapper v. Commissioner,
T.C. Memo. 1986-597; cf. Coleman v. Commissioner, T.C. Memo.
1974-78 (Court refused to apply alternative computation because
taxpayer failed to provide proof of partnership’s asset basis),
affd. 540 F.2d 427 (9th Cir. 1976). The computation may require
adjustments to reflect “any significant discrepancies arising as a
result of contributed property, transfers of partnership interest,
or distributions of property to partners.” Sec. 1.705-1(b), Income
Tax Regs.
The record contains no evidence that any contributions were
entered on the Bitker partnership’s books at other than their tax
bases. Nor does the record reflect any differences between the
financial and tax accounting treatment of partnership income or
expense items or partnership losses (before the year in issue) that
were not previously deductible by reason of section 704(d). Nor is
an adjustment required for Ray Bitker’s transfer of his interest in
the Bitker partnership to petitioner husbands in 1989 or for
petitioner husbands’ transfers to petitioner wives in 1991 because
all of those transfers were gifts. (The respective bases of
petitioners are determined using transferred bases for the
interests received by gifts. Secs. 742, 1015(a); cf. Tapper v.
Commissioner, supra (adjustment required to reflect retirement of
former partner’s interest in prior year).)
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