This involves a ranch partnership between father and son where father passed away in Sept and his son inherits his interest. Under Sec 706)c)(2)(A), the partnership tax year ends with respect to the deceased partner (and in this case the partnership as well).
This results in a huge tax (including self employmnet) on father's final return since most income is received in January and major expenses are paid in fall (feed, pasture rent, equipment purchases) and son would end up with NOL. The tax on fathers return is more than double that what father and son's total taxes would add up to.
I am trying to justify closing the partnership on 12/31/06 and keep the taxes at a normal level as would have been the case before Sec 706 was revised in 1997. Appreciate any comments. (Sch J does not help much)
Dan
This results in a huge tax (including self employmnet) on father's final return since most income is received in January and major expenses are paid in fall (feed, pasture rent, equipment purchases) and son would end up with NOL. The tax on fathers return is more than double that what father and son's total taxes would add up to.
I am trying to justify closing the partnership on 12/31/06 and keep the taxes at a normal level as would have been the case before Sec 706 was revised in 1997. Appreciate any comments. (Sch J does not help much)
Dan
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