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conforming to recognized principles or accepted rules and
standards”. An uncertainty in the meaning of the words
“legitimate” and “significant” may result in applications not
intended by the majority.
Third, the majority requires only that the creation of the
partnership be supported by a legitimate and significant nontax
reason. Under the majority’s analysis, therefore, the adequate
and full consideration exception would seem to be satisfied as to
all property transferred to a partnership as long as the record
establishes the requisite legitimate and significant nontax
reason and that the transferors received partnership interests
proportionate to the value of the transferred property. Where,
as here, the legitimacy of a partnership is not at issue,4 I do
not believe that the Court’s analysis should rest solely on the
transferor’s reason for forming the partnership; the Court’s
analysis should also include an inquiry as to the business
purpose for the transfers to the partnership. In fact, as I read
the relevant text underlying the adequate and full consideration
exception, that text speaks only to a “sale” of property and
makes no specific statement as to the purchaser of that property.
MARVEL, J., agrees with this concurring in result opinion.
4 The majority states that it is not deciding whether BFLP
is a partnership that should be recognized for Federal tax
purposes. Majority op. p. 52 n.11.
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