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Petitioner acknowledges that none of the cases he cites involves
a partnership. Instead he argues that, because partnership
taxable income is computed in the same manner as that of an
individual, the existence of a partnership does not matter.
Petitioner argues that the combination of section 703(a) and the
cited cases leads to the conclusion that a taxpayer does not have
income if there are restrictions on its receipt.
We disagree with petitioner’s argument for several reasons,
the first of which is that the cases petitioner cites do not
involve partnerships or partners’ distributive shares. Cohen &
Burke was a partnership, and, therefore, the cases petitioner
cites do not apply.
Secondly, section 703 describes how partnership income is
computed;3 i.e., how taxable income is calculated from gross
3 SEC. 703(a). Income and Deductions.--The taxable income
of a partnership shall be computed in the same manner as
in the case of an individual except that--
(1) the items described in section 702(a) shall be
separately stated, and
(2) the following deductions shall not be allowed to
the partnership:
(A) the deductions for personal exemptions
provided in section 151,
(B) the deduction for taxes provided in section
164(a) with respect to taxes, described in section
901, paid or accrued to foreign countries and to
possessions of the United States,
(continued...)
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