Analyzing Fill-Up Allocations of Boot: The Implications Might Surprise You
Author: Matthew E. Rappaport.
Source: Volume 35, Number 03, Spring 2018 , pp.7-26(20)
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Abstract:
When a fund enacts a like-kind exchange and some limited partners wish to “cash out” by redeeming their respective partnership interests, many practitioners entertain a “fill-up allocation” as a potential solution. This article explores the tax treatment of fill-up allocations in several like-kind exchange scenarios and illustrates why fill-up allocations may not have substantial economic effect in every context.Keywords: like-kind exchange, partnership taxation, fill-up allocations, special allocations, substantial economic effect, IRC Sec. 1031, IRC Sec. 1245, IRC Sec. 1250
Affiliations:
1: Attorney at Law.