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determine, as required by section 723, its basis in the property
that a partner contributed to it, the partnership is required to
determine the basis of such partner in such property. In making
those determinations, the partnership is required, inter alia, to
determine the character of any property received by the partner-
ship, such as whether it is a contribution or a loan.
In the instant cases, in order for Evergreen Trading to
determine, as required by section 723, its respective bases in
the properties that its partners purportedly contributed to it,
Evergreen Trading was required to determine the respective bases
of such partners in such properties. In making those determina-
tions, Evergreen Trading was required, inter alia, to determine
the character of any property that Evergreen Trading received
from each member, such as whether it was a contribution or a loan
and whether any such property received from each member should be
aggregated with other property received from each such member.
The following regulations promulgated under section
6231(a)(3), which defines the term “partnership item”, provide
that the above-described items relating to the purported contri-
butions of certain properties to Evergreen Trading by its respec-
14(...continued)
Since such property [contributed to the partnership by
a partner] has the same basis in the hands of the
partnership as it had in the hands of the contributing
partner, the holding period of such property for the
partnership includes the period during which it was
held by the partner. * * *
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Last modified: November 10, 2007