Bulletin No. 2004-51 December 20, 2004

REG–149519–03, page 1009. Proposed regulations under section 707 of the Code provide guidance relating to the treatment of transactions between a partnership and its partners as disguised sales of partnership interests between partners. The regulations describe circumstances in which a transfer of consideration (including the assumption of a liability) by a purchasing partner to a partnership and a transfer of consideration by the partnership to a selling partner constitute a sale of a partnership interest. In addition, the proposed rules require disclosure of certain transfers and assumptions of liabilities to the Service. A public hearing is scheduled for March 8, 2005.