If a taxpayer realized a terminal loss on a transfer of property to or by a partnership or between partnerships, he may find Revenue threatening to deny the loss. Revenue is taking this position in many cases where there are bona fide business reasons for the transfer. And the specific anti-avoidance rules do not seem to apply in other cases.
Real estate is involved in many cases.
For example, two partnerships may have merged to increase the base for pooling revenue, eliminate the competition between adjoining buildings, and reduce common administration costs. Or an individual may have become disenchanted with the management of his condominium unit held in a partnership and requested that it be transferred to him to enhance his control and possibly his liquidity. In other cases, limited partnerships had partners with serious personal financial problems resulting in insolvency or bankruptcy. The property was transferred to a new partnership that included only those partners willing and able to go forward and possibly make capital contributions. If the general partner was not cooperative, the limited partners may have stayed the same and installed a new general partner.