Better Twice Measured: Partner Basis from Partnership Debt

23 Pages Posted: 27 May 2015

See all articles by Calvin H. Johnson

Calvin H. Johnson

University of Texas at Austin - School of Law

Date Written: April 6, 2015

Abstract

Johnson argues that the current regulations under section 752 allow free trade in the purchase and sale of naked deductions, which should be ended. Johnson argues that proposed new regulations should not allow any nonrecourse partnership liability to be allocated to a partner who has a zero or negative capital account and no claim on equity, because Crane requires an equity interest for the debt to be considered a burden under economic substance. Johnson concludes that Treasury should fix the current regulations without involving Congress.

Suggested Citation

Johnson, Calvin Harsha, Better Twice Measured: Partner Basis from Partnership Debt (April 6, 2015). Tax Notes, Vol. 146, No. 9, 2015, U of Texas Law, Public Law Research Paper No. UTPUB628, Available at SSRN: https://ssrn.com/abstract=2611361 or http://dx.doi.org/10.2139/ssrn.2611361

Calvin Harsha Johnson (Contact Author)

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States
512-232-1306 (Phone)
512-232-2399 (Fax)

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