- 33 -
Having rejected the linchpin in petitioners’ position under
section 469(g)(1)(A) (viz., Mr. Ramsburg purchased from Kildare
Timmy its horses and stud rights immediately before Kildare Timmy
made a distribution to him in liquidation of his interest in that
partnership), we shall now analyze whether, as required by
section 469(g)(1)(A), petitioners recognized all of the gain or
all of the loss, as the case may be, realized upon the distribu-
tion by Kildare Timmy to Mr. Ramsburg of Kildare Timmy’s horses
and stud rights and Kildare Timmy’s bank account balance.
Section 731(a) provides:
SEC. 731. EXTENT OF RECOGNITION OF GAIN OR LOSS ON
DISTRIBUTION.
(a) Partners.--In the case of a distribution by a
partnership to a partner--
(1) gain shall not be recognized to such
partner, except to the extent that any money dis-
tributed exceeds the adjusted basis of such part-
ner’s interest in the partnership immediately
before the distribution, and
(2) loss shall not be recognized to such
partner, except that upon a distribution in liqui-
dation of a partner’s interest in a partnership
where no property other than that described in
subparagraph (A) or (B) is distributed to such
partner, loss shall be recognized to the extent of
the excess of the adjusted basis of such partner’s
interest in the partnership over the sum of--
(A) any money distributed, and
26(...continued)
[the] disposition of horses owned by * * * Kildare Timmy”.
Consequently, pursuant to the terms of Mr. Stottlemeyer’s note,
Mr. Stottlemeyer did not owe Mr. Ramsburg anything.
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