TAX 9900 Chapter Notes - Chapter 8: Basis Of Accounting, Unsecured Debt, Capital Account
Document Summary
L has no obligation to contr more cap to pship or to restore any deficit in her cap account. G &l agree to share profits and losses equally to the extent of each ps basis; if ls basis is reduced to zero. L could only be allocated pship losses to the extent of her capital contribution of 50: court of claims held that despite the guarantee, the mortgage should be treated as nonrecourse. Permitted lp to deduct losses bourne economically by guaranteeing partner: regs prospectively overruled and directed treasury to revise regs under 752, this put limits on so called bottom dollar guarantees and other types of partial guarantees. If a p contributes prop that is subject to a 1. 752-7 liability to a pship, it is not reflected in either the ps or pships basis. Liab is reflected in the ps capital account, creating disparity that 704c was enacted to address.
