New York Toys With Out Of State Partner
If a 754 election had been in effect, there would have been a lower flow-through of gain from the partnership and a modest or no gain or loss on liquidation. The lack of the inside-basis might have minimal effect on federal tax due, since the capital loss on liquidation of the partnership would offset the flow-through gain. There likely would have been no state income tax effect either, if Mr. Olsheim had lived in New York. The capital loss would be included in the computation of his New York state income tax.
Bank Cannot Issue 1099-C And Subsequently Try To Collect
If this ruling stands, financial institutions will be encouraged to delay having an identifiable event as long as there is the dimmest hope that something might be collected. 1099-C when finally issued will be a blast from the past to the recipient, who if they are diligent will probably be able to come up with an argument that the debt expired in a much earlier year.
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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.