Tax Lawyer, Vol. 60, No. 2 SOLVING SECTION 734(b) 473 SOLVING SECTION 734(b) Leigh Osofsky* I. INTRODUCTION The partnership tax contribution and distribution rules pursue a policy of maximum nonrecognition.1 Partners can move property in and out of partnerships with the least possible tax disincentive. This policy is essential to ensure efficient partnership formation and operation decisions. However, the nonrecognition rules also allow partners to shift and defer gain. This threatens tax...
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