Tax Court can determine partnership tax motives in partner-level cases

06/5/2009 | Journal of Accountancy online

The U.S. Court of Appeals for the 9th Circuit has held, in a case involving individual partners who invested in cattle-breeding partnerships, that the Tax Court has jurisdiction to determine whether the partnerships' transactions were tax motivated. The decision reverses the Tax Court's holding that it lacked jurisdiction in a partner-level proceeding to rule on partnership tax motives. The 9th Circuit went on to hold that the transactions were, in fact, tax motivated.

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