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The transaction in which gain or loss was recog-
nized was the taxable liquidation of the Kildare Timmy
partnership. The liquidation was fully taxable because
the only property distributed in liquidation was money.
* * * As a result, the Petitioners incurred a loss on
the disposition of Jacob R. Ramsburg, Jr.’s interest in
the Kildare Timmy partnership in the amount of $69,772.
* * *
Provided that the Tax Court finds that the sale of
the horses from the partnership to Mr. Ramsburg was a
sale for tax purposes, it is clear that the liquidation
of the partnership, involving the distribution of only
money, was a fully taxable transaction under �731 of
the Code. Section 731(a) of the Code provides that
gain or loss is recognized in the case of a liquidating
distribution by a partnership to a partner which only
consists of money. Any gain or loss recognized pursu-
ant to �731(a) of the Code is “considered as gain or
loss from the sale or exchange of the partnership
interest of the distributee partner.” I.R.C. �731(a)
* * *.
With regard to the [sic] Mr. Ramsburg’s purchase
of the horses from the Kildare Timmy partnership, Mr.
Ramsburg and Mr. Stottlemeyer were dealing at arms’
length. The evidence indicates that, at the time the
sale of the horses was agreed to, each owned 50% of the
capital interest of the partnership. * * * Specifi-
cally, the form of the transaction was structured as a
sale, the transaction was accounted for on the 1998
partnership return and the Petitioners’ 1998 individual
tax return as a sale, both of which were prepared by
Petitioners’ certified public accountants. * * *
With respect to Kildare Timmy’s claimed sale of its horses to Mr.
Ramsburg, petitioners contend:
the evidence establishes that [petitioner] Jacob R.
Ramsburg, Jr. purchased the horses[24] from the Kildare
24Although not altogether clear, it appears that, when
petitioners contend that Mr. Ramsburg purchased the “horses” from
Kildare Timmy, petitioners intend to include in their reference
to the “horses” not only Kildare Timmy’s racing and breeding
horses but also its stud rights, and we so assume hereinafter.
(continued...)
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