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income.4 A partnership itself pays no taxes, sec. 701, but the
income of the partnership must be reported, and that income is
calculated generally in the same manner as an individual computes
his personal income, United States v. Basye, supra at 448. In
Basye, the Supreme Court stated:
For this purpose then, the partnership is regarded as
an independently recognizable entity apart from the
aggregate of its partners. Once its income is
ascertained and reported, its existence may be
disregarded since each partner must pay tax on a
portion of the total income as if the partnership were
merely an agent or conduit through which the income
passed.
The issue here is not whether the partnership itself was
entitled to income. Instead, the issue is whether petitioner was
required to report for 1998 his distributive share of income that
was already earned by the partnership during that year. The
income was earned by the partnership during 1998, and there was
nothing conditional or contingent about its receipt. Petitioner,
3(...continued)
(C) the deduction for charitable contributions
provided in section 170,
(D) the net operating loss deduction provided
in section 172,
(E) the additional itemized deductions for
individuals provided in part VII of subchapter B
(section 211 and following), and
(F) the deduction for depletion under section
611 with respect to oil and gas wells.
4 See sec. 63(a) (defining taxable income as “gross income
minus the deductions allowed by this chapter”).
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