Harbor Cove Marina Partners Partnership, Robert A. Collins, A Partner Other Than The Tax Matters Partner - Page 29

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          continues to be carried on by any of its partners in a                      
          partnership.”  Sec. 1.708-1(b)(1)(3)(i), Income Tax Regs.  In               
          other words, the regulations indicate, a partnership is                     
          terminated under section 708(b)(1)(A) only when the winding up of           
          its business affairs is completed and “all remaining assets,                
          consisting only of cash, are distributed to the partners”.  Id.             
               The decided cases apply the statute similarly.  Those cases            
          indicate that a nominal amount of continuing business or                    
          financial activity precludes a partnership from terminating for             
          Federal tax purposes even when the partnership has abandoned or             
          discontinued its primary business activity.  In Foxman v.                   
          Commissioner, 41 T.C. 535 (1964), affd. 352 F.2d 466 (3d Cir.               
          1965), for example, a partnership sold its assets to a                      
          corporation in which the partners were shareholders and received            
          in exchange two promissory notes.  The Court held that the                  
          partnership continued to exist after its asset sale in that it              
          held the notes received in the sale, collected interest on those            
          notes, and made minor purchases.  Id. at 556-557.  In Baker                 
          Commodities, Inc. v. Commissioner, 415 F.2d 519 (9th Cir. 1969),            
          affg. 48 T.C. 374 (1967), the Court of Appeals for the Ninth                
          Circuit reached a similar result.  There, the partnership’s                 
          principal asset was a convalescent hospital that was closed and             
          then sold 9 months later in exchange for a note.  The court cited           
          Foxman and held that the partnership’s sale of its asset did not            

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