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Unformatted text preview: partnership liquidated, distributing the stock of A to Ms. Carlos and the stock of B to Mr. Dillon in liquidation of their partnership interests. In general, Sec. 731 provides that a distribution of capital gain property in liquidation of a partners interest produces no current gain or loss. Each partner would receive a carryover basis in the A & B stock. However, the IRS applied the step transaction doctrine to ignore the contribution and distribution of property to and from the partnership. The transaction was treated as a taxable exchange of stock between Ms. Carlos and Mr. Dillon forcing each to recognize a capital gain....
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This note was uploaded on 09/09/2011 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.
- Fall '08