- 9 -
alien), a C corporation, or an estate of a deceased
partner. For purposes of the preceding sentence, a
husband and wife (and their estates) shall be treated
as 1 partner.
(ii) Election to have subchapter apply.--A
partnership (within the meaning of subparagraph (A))
may for any taxable year elect to have clause (i) not
apply. Such election shall apply for such taxable year
and all subsequent taxable years unless revoked with
the consent of the Secretary.
Respondent claims that Clarion Forex disqualifies Alameda
from the small partnership exception because it is a disregarded
entity under section 301.7701-3(b)(1)(ii), Proced. & Admin Regs.
Respondent takes the position that a disregarded entity is a
pass-through partner as defined in section 6231(a)(9).3 See Rev.
Rul. 2004-88, 2004-2 C.B. 165. The small partnership exception
is not applicable where any partner in the partnership is a
“pass-through partner”. See sec. 301.6231(a)(1)-1(a)(2), Proced.
& Admin. Regs. However, neither of the parties identified to
whom the interest in Clarion Forex passes through. Nor do we
have sufficient evidence of Clarion Forex’s status as a
disregarded entity. Therefore, we specifically do not determine
whether TEFRA applies to the adjustments.
However, with respect to the adjustments relating to the
deduction for legal, accounting, consulting, and advisory fees,
3Sec. 6231(a)(9) provides that “The term ‘pass-thru partner’
means a partnership, estate, trust, S corporation, nominee, or
other similar person through whom other persons hold an interest
in the partnership with respect to which proceedings under this
subchapter are conducted.”
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: November 10, 2007