Ezel / IRS Rulings / 201014062

CCA 201014062: IRS discusses timing of income from partnership hot assets

Number
201014062
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Partnership Item
Topics
Procedure, penalties, and administration
Code sections
§ 453, § 6231
Ruling dated
March 5, 2010
Publicly released
April 9, 2010
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2010
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advice discusses when income attributable to partnership hot assets should be recognized after a sale. It states that if the sale occurred in year 1, the income should be recognized in that year regardless of when payments are received, and probably should not be recognized again when the payments arrive if it was fully recognized in year 1. The advice expressly states that section 453 is outside the writer's jurisdiction and does not opine on whether the earlier substantive treatment is correct.

Ruling snapshot

  • Question: When should income attributable to partnership hot assets be recognized if the sale occurs before the related payments are received?
  • Outcome: Advice given
  • Key authorities: IRC § 453

Full text (IRS public release)

ID: CCA_2010030515541037 Number: 201014062
Release Date: 4/9/2010
Office: ----------
UILC: 6231.03-00

From: -------------------
Sent: Friday, March 05, 2010 3:54:13 PM
To: --------------------
Cc: ----------------------------------------------------
Subject: RE: [ -----------------------]

If the sale occurred in year 1 (regardless of when payments are received), that is when income attributable to the hot assets must be recognized under section 453 according to the earlier statements. If it is fully recognizable in year 1, it probably should not be recognized a second time when the payments are actually received.

Section 453 is outside my jurisdiction so I cannot opine on whether this earlier statement of the substantive treatment is correct.

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