Publication Date

1997

Journal

SMU Law Review

Abstract

The article critiques the complexity and ineffectiveness of current tax laws governing contributions of property to partnerships, particularly under Subchapter K. It argues that the existing framework, which aims to tax built-in gains or losses at the time of contribution, is overly complicated and often fails to achieve its intended goals due to provisions like the ceiling rule. The authors propose the adoption of the deferred sale method as a simpler and more effective alternative. This method defers the recognition of built-in gains or losses until specific triggering events, such as the sale or distribution of the property by the partnership or the contributor's disposal of their partnership interest. The deferred sale method is presented as a non-radical solution that aligns with existing valuation practices and eliminates the need for numerous anti-abuse rules, thereby simplifying the law and improving its clarity and efficiency.

Volume

51

Issue

1

First Page

1

Last Page

36

Publisher

SMU Dedman School of Law

Disciplines

Law

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