Canadian limited partner had U.S. "permanent establishment." (Unger versus Comm'r) (Recent Cases and Rulings)
Article Abstract:
Unger versus Comm'r concerns the taxation of foreign investors in real estate limited partnerships. A Canadian resident invested in a real estate limited partnership in Boston, MA. He did not include his partnership profits in his tax return for 1984, claiming that pursuant to the entity theory of partnership taxation, he had no permanent establishment and merely held an interest in the partnership. The Internal Revenue Service (IRS), however, countered that under the aggregate theory, the partnership's office in Boston is deemed as its partners' permanent establishment. The District of Columbia Circuit Court upheld the aggregate theory reasoning of the IRS.
Publication Name: Journal of Partnership Taxation
Subject: Business
ISSN: 0749-4513
Year: 1992
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Profits interest in partnership has only speculative value - Campbell reversed
Article Abstract:
Campbell versus Comm'r concerns the taxation of profits interest received in exchange for services. For bringing together land syndications, the taxpayer was paid with profits interests in the limited partnerships formed. The taxpayer claimed that under Section 721 of the Internal Revenue Code, profits interests in exchange for services are not taxable. The Tax Court ruled, however, that the value of the profits interests received should be included in the taxpayer's gross income. The Eighth Circuit court reversed the Tax Court's decision upon appeal, stating that the profits interests received had no fair market value and should not be treated as income.
Publication Name: Journal of Partnership Taxation
Subject: Business
ISSN: 0749-4513
Year: 1992
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Partnership return did not affect partner's statute of limitations
Article Abstract:
The cases Siben versus Comm'r and Stahl versus Comm'r involves partners who incurred losses in 1979 and 1980 and who were given extensions in the filing of their individual tax returns. They claimed that the Internal Revenue Service (IRS) cannot disallow deductions pertaining to the losses since the statute of limitations had expired on the partnership's tax return. However, the IRS contended that the statute takes effect from the filing of the individual tax returns. Both the Tax Court and the Second Circuit court ruled that the statute of limitations for tax assessment is based on the individual returns and not on the partnership return.
Publication Name: Journal of Partnership Taxation
Subject: Business
ISSN: 0749-4513
Year: 1992
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