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Certain Distributions Treated as Sales or Exchanges

Certain Distributions Treated as Sales or Exchanges


Internal Revenue Service


This document contains proposed regulations that prescribe how a partner

should measure its interest in a partnership’s unrealized receivables and inventory

items, and that provide guidance regarding the tax consequences of a distribution that

causes a reduction in that interest. The proposed regulations take into account

statutory changes that have occurred subsequent to the issuance of the existing

regulations. The proposed regulations affect partners in partnerships that own

unrealized receivables and inventory items and that make a distribution to one or more partners.



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