Sec 179 question

[veritas]

If a partner buys the assets from his previous partner would the portion allocated for equipment qualify for Sec. 179?

I have to admit I'm pretty weak with partnerships.

[Bees Knees]

TTB, page 9-15, "Related parties. If property is purchased from a related party, and related party rules would result in the disallowance of losses under Section 267 or 707(b), the property does not qualify for a Section 179 deduction. [Reg. Sec. 1.179-4(c)]

Section 707(b) disallows a loss when property is distributed from a partnership to a 50% or more partner. Further, it basically says a subsequent sale of the property distributed will be treated as being subject to the Section 267 loss limitation rules.

So my interpretation of this is that since a loss would be disallowed if one partner tried to sell the distributed asset to the other, then the Section 179 deduction would also be disallowed on such sale.