- 26 -
ers to treat for 1998 petitioners’ passive losses attributable to
Kildare Timmy as nonpassive losses. It is petitioners’ position
that section 469(g)(1) allows such treatment. Respondent dis-
agrees.
In support of petitioners’ position, petitioners argue that
Mr. Ramsburg
disposed of his entire interest in the activity of the
Kildare Timmy partnership in a transaction in which
gain or loss was recognized, as required by �469(g)(1)
* * *
23(...continued)
(1) Fully Taxable Transaction.--
(A) In general.--If all gain or loss
realized on such disposition is recognized,
the excess of–-
(i) any loss from such activity for
such taxable year (determined after the
application of subsection (b)), over
(ii) any net income or gain for
such taxable year from all other passive
activities (determined after the appli-
cation of subsection (b)),
shall be treated as a loss which is not from
a passive activity.
(B) Subparagraph (A) not to apply to
disposition involving related party.--If the
taxpayer and the person acquiring the inter-
est bear a relationship to each other de-
scribed in section 267(b) or section
707(b)(1), then subparagraph (A) shall not
apply to any loss of the taxpayer until the
taxable year in which such interest is ac-
quired (in a transaction described in sub-
paragraph (A)) by another person who does not
bear such a relationship to the taxpayer.
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