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Substantial Economic Effect
What is economic effect in relation to substantial economic effect?  In previous articles I have discussed substantial economic effect in general and the background or history.  The regulations under IRC 704(b) test a partnership allocation to determine if it has substantial economic effect, and such is a two-part test.  First the allocation must have economic...
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Under Internal Revenue Code Section 704, a partnership agreement is to determine a partner’s distributive share of the allocated tax items, such as income, loss, gain and credits.  This flexibility is, in part, what can make a partnership an attractive choice of entity for many small businesses or business owners.  However, it is also this...
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Business owners may have heard about economic substance from their business attorneys or tax attorneys.  The Economic Substance Doctrine is a “test” by which the Internal Revenue Service will review certain transactions.  As a Denver tax attorney John McGuire has dealt with the Economic Substance Doctrine first hand for a number of clients and this...
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