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Post by Sapphire Capital on Oct 6, 2008 22:41:27 GMT 4
More on Collapsible Real Estate Partnerships Karen C. Burke University of San Diego School of Law September 18, 2008 San Diego Legal Studies Paper No. 08-074 Abstract: The commentary explains the operation of the section 1(h)(6)(B) limitation on gain taxed at 25% when a partner's only capital gain for the year consists of unrecaptured section 1250 gain on sale of a partnership interest. As clarified by the preamble to the final regulations, the section 1(h)(6)(B) limitation should be irrelevant in this situation, so that the selling partner's entire unrecaptured section 1250 gain is taxed at 25% (rather than the 15% rate for residual capital gain). While the preamble should dispel any confusion concerning the proper operation of the section 1(h)(6)(B) limitation under existing law, the problem would not arise if the character of section 1231 gain were preserved under the look-through rules applicable to sales of partnership interests. papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1270223_code254274.pdf?abstractid=1270223&mirid=2
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