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(holding that each partner is taxed on his distributive share of
partnership income without regard to whether the amount is
actually distributed to him).
Petitioner argues, however, that the existence of a real
controversy between petitioner and Mr. Cohen rendered the amount
of his distributive share indefinite and that the partnership
receipts in escrow are “frozen” and therefore unavailable to
petitioner. Petitioner cites section 703(a) for the proposition
that the taxable income of a partnership is computed in the same
manner as that of an individual and cites several cases to
support his argument that his dispute with his former partner
postpones the inclusion of his distributive share because he does
not have a claim of right to the income. Petitioner chiefly
relies on: North American Oil Consolidated v. Burnet, 286 U.S.
417 (1932) (taxpayer must include income to which he has a claim
of right); Estate of Fairbanks v. Commissioner, 3 T.C. 260 (1944)
(dispute between executors and decedent’s wife precluded
inclusion in the estate’s income); Madigan v. Commissioner, 43
B.T.A. 549 (1941) (taxpayer who placed funds in his personal
account pending outcome of an accounting was not required to
include the entire amount in income); Preston v. Commissioner, 35
B.T.A. 312 (1937) (dispute between two attorneys, who were not
partners, precluded inclusion in income). Petitioner’s reliance
on the foregoing cases is misplaced for reasons discussed below.
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