Source: https://foreclosurealternative.wordpress.com/2017/05/23/has-anyone-got-a-free-home-from-livinglies/
Timestamp: 2017-06-27 15:34:04
Document Index: 244546762

Matched Legal Cases: ['§1', '§1', '§1', '§1', '§1', '§1']

HAS ANYONE GOT A FREE HOME FROM LIVINGLIES ? – ForeclosureAlternative
NOT FOR LEGAL ADVICE – NOT AN ATTORNEY Menu	HAS ANYONE GOT A FREE HOME FROM LIVINGLIES ?	May 23, 2017 ~ masterservicer	IT’S CALLED CLOSED END CONSUMER LEASES REPLACING MORTGAGES. And livinglies is still talking about what? Trusts!
Only a fool or desperate household would still listen to that nonsense. Read Sales vs. Redemption’s of Partnership Interests Follow the yellow brick road?
Often, when a partner of a partnership is going to depart, there may be a choice as to whether the remaining partners will purchase the departing partner’s interest on a pro rata basis or whether the partnership will redeem the interest. Under either approach, the departing partner ultimately will wind up with the same amount of proceeds and the remaining partners will wind up with the same percentage ownership interest in the partnership after the departure.
However, depending on which road the parties take, the ultimate tax results can differ based on various detours along the way, and there can be visits with monkeys, poppies and even the wizard himself. On November 26, 2004, Treasury finally issued proposed regulations addressing disguised sales of partnership interests (the “Proposed Regulations”). Despite Congressional warning, the Proposed Regulations create a framework that may call into question vanilla property contribution/distribution transactions. The starting point in the analysis is Prop. Reg. §1.707-7(a)(1), which provides: Except as otherwise provided in this section, if a transfer of money, property or other consideration (including the assumption of a liability) (consideration) by a partner (purchasing partner) to a partnership and a transfer of consideration by the partnership to 4 another partner (selling partner) are described in paragraph (b)(1) of this section, the transfers are treated as a sale, in whole or in part, of the selling partner’s interest in the partnership to the purchasing partner.
However, the critical provision is Prop. Reg. §1.707-7(b)(1), which provides: A transfer of consideration by a purchasing partner to a partnership and a transfer of consideration by the partnership to a selling partner constitute a sale, in whole or in part, of the selling partner’s interest in the partnership to the purchasing partner only if, based on all the facts and circumstances—(i) The transfer of consideration by the partnership to the selling partner would not have been made but for the transfer of consideration to the partnership by the purchasing partner; and (ii) in cases in which the transfers are not made simultaneously, the subsequent transfer is not dependent on the entrepreneurial risks of partnership operations. (Emphasis added.) Note that the Proposed Regulations did not adopt the “double but for” test that would find a disguised sale of a partnership interest only where both the transfer to and the transfer by the partnership would not have been made but for the other transfer. Just as in the Disguised Property Regulations, the Proposed Regulations contain a twoyear presumption. That is, Prop. Reg. §1.707-7(c) provides that “if within a two-year period a purchasing partner transfers consideration to a partnership and the partnership transfers consideration to a selling partner (without regard to the order of the transfers), the transfers are presumed to be a sale, in whole or in part, of the selling partner’s interest in the partnership to the purchasing partner unless the facts and circumstances clearly establish that the transfers do not constitute a sale.” On the other hand, Prop. Reg. §1.707-7(d) provides that “if a transfer of consideration by a purchasing partner to a partnership and the transfer of consideration by the partnership to a selling partner (without regard to the order of the transfers) occur more than two years apart, the transfers are presumed not to be a sale, in whole or in part, of the selling partner’s interest in the partnership to the purchasing partner unless the facts and circumstances clearly establish that the transfers constitute a sale.” (See Prop. Reg. §1.707-7(b)(2) which sets forth ten relevant facts and circumstances that Treasury regards as tending to prove the existence of a sale.) A transfer is considered to take place on the date of the actual transfer or, if earlier, on the date that the transferor agrees in writing to make the transfer. The sale of the selling partner’s partnership interest is considered to take place on the date of the first to occur of the selling partner’s receipt of consideration from the partnership or the transfer of consideration to the partnership by the purchasing partner. Prop. Reg. §1.707-7(a)(2)(ii)(A). This rule is not too difficult to apply when there is a simultaneous transfer of consideration by the purchasing and selling partners to and from the partnership. However, the deemed sale rules become far more difficult in application in the case of non-simultaneous transfers or when the property distributed to the selling partner is different than that contributed by the purchasing partner. The Proposed Regulations contain a whole litany of rules addressing these situations.
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