#### § 1.707-0 Table of contents.

This section lists the captions that appear in §§ 1.707-1 through 1.707-9.

## § 1.707-1 Transactions Between Partner and Partnership

(a) Partner not acting in capacity as partner.

(b) Certain sales or exchanges of property with respect to controlled partnerships.

(1) Losses disallowed.

(2) Gains treated as ordinary income.

(3) Ownership of a capital or profits interest.

(c) Guaranteed payments.

## § 1.707-2 Disguised Payments for Services. [Reserved]

## § 1.707-3 Disguised Sales of Property to Partnership; General Rule.

(a) Treatment of transfers as a sale.

(1) In general.

(2) Definition and timing of sale.

(3) Application of disguised sale rules.

(4) Deemed terminations under section 708.

(b) Transfers treated as a sale.

(1) In general.

(2) Facts and circumstances.

(c) Transfers made within two years presumed to be a sale.

(1) In general.

(2) Disclosure of transfers made within two years.

(d) Transfers made more than two years apart presumed not to be a sale.

(e) Scope.

(f) Examples.

## § 1.707-4 Disguised Sales of Property to Partnership; Special Rules Applicable to Guaranteed Payments, Preferred Returns, Operating Cash Flow Distributions, and Reimbursements of Preformation Expenditures

(a) Guaranteed payments and preferred returns.

(1) Guaranteed payment not treated as part of a sale.

(i) In general.

(ii) Reasonable guaranteed payments.

(iii) Unreasonable guaranteed payments.

(2) Presumption regarding reasonable preferred returns.

(3) Definition of reasonable preferred returns and guaranteed payments.

(i) In general.

(ii) Reasonable amount.

(4) Examples.

(b) Presumption regarding operating cash flow distributions.

(1) In general.

(2) Operating cash flow distributions.

(i) In general.

(ii) Operating cash flow safe harbor.

(iii) Tiered partnerships.

(c) Accumulation of guaranteed payments, preferred returns, and operating cash flow distributions.

(d) Exception for reimbursements of preformation expenditures.

(1) In general.

(2) Capital expenditures incurred by another person.

(3) Contribution of a partnership interest with capital expenditures property.

(4) Special rule for qualified liabilities.

(i) In general.

(ii) Anti-abuse rule.

(5) Scope of capital expenditures.

(6) Example.

(e) Other exceptions.

(f) Ordering rule cross reference.

## § 1.707-5 Disguised Sales of Property to Partnership; Special Rules Relating to Liabilities

(a) Liability assumed or taken subject to by partnership.

(1) In general.

(2) Partner's share of liability.

(i) Recourse liability.

(ii) Nonrecourse liability.

(3) Reduction of partner's share of liability.

(4) Special rule applicable to transfers of encumbered property to a partnership by more than one partner pursuant to a plan.

(5) Special rule applicable to qualified liabilities.

(6) Qualified liability of a partner defined.

(7) Liability incurred within two years of transfer presumed to be in anticipation of the transfer.

(i) In general.

(ii) Disclosure of transfers of property subject to liabilities incurred within two years of the transfer.

(8) Liability incurred by another person.

(b) Treatment of debt-financed transfers of consideration by partnerships.

(1) In general.

(2) Partner's allocable share of liability.

(i) In general.

(ii) Debt-financed transfers made pursuant to a plan.

(A) In general.

(B) Special rule.

(iii) Reduction of partner's share of liability.

(3) Ordering rule.

(c) Refinancings.

(d) Share of liability where assumption accompanied by transfer of money.

(e) Tiered partnerships and other related persons.

(f) Examples.

## § 1.707-6 Disguised Sales of Property by Partnership to Partner; General Rules

(a) In general.

(b) Special rules relating to liabilities.

(1) In general.

(2) Qualified liabilities.

(c) Disclosure rules.

(d) Examples.

## § 1.707-7 Disguised Sales of Partnership Interests. [Reserved]

## § 1.707-8 Disclosure of Certain Information

(a) In general.

(b) Method of providing disclosure.

(c) Disclosure by certain partnerships.

## § 1.707-9 Effective Dates and Transitional Rules

(a) Sections 1.707-3 through 1.707-6.

(1) In general.

(2) Transfers occurring on or before April 24, 1991.

(3) Effective date of section 73 of the Tax Reform Act of 1984.

(b) Section 1.707-8 disclosure of certain information.

[T.D. 8439, 57 FR 44978, Sept. 30, 1992, as amended by T.D. 9787, 81 FR 69296, Oct. 5, 2016]