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burden to respondent. Petitioner has not substantiated the items
at issue, including the basis of his partnership interest, and
therefore, the burden remains on petitioner.
II. Sale of Partnership Interest
Section 741 provides that the sale or exchange of a
partnership interest shall, except to the extent section 751
applies, be treated as the sale or exchange of a capital asset.
Gain or loss from the sale of a partnership interest is measured
by the difference between the amount realized and the adjusted
basis of the partnership interest. Sec. 1001(a).
The amount realized is the sum of any money received plus
the fair market value of property received. Sec. 1001(b). A
partner’s adjusted basis in his partnership interest is generally
the basis of such interest determined under section 722,
increased or decreased by the partner’s distributive share of
income, loss, and certain other items. Sec. 705. The basis of
an interest in a partnership acquired by a contribution of
property, including money, is the amount of money and adjusted
basis of such property to the partner at the time of
contribution, increased by the amount of any gain recognized
under section 721(b) at the time. Sec. 722. Any increase in a
partner’s share of liabilities of the partnership is considered a
contribution by such partner to the partnership and increases the
basis of the partner’s interest in the partnership. Sec. 752(a).
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Last modified: May 25, 2011