SECTION 11. EFFECT ON OTHER

DOCUMENTS

Notice 2011–44, 2011–25 I.R.B. 883, is modified and superseded.

January 13, 2014 414 Bulletin No. 2014–3

the § 47 rehabilitation credits (or their cash equivalent) and a preferred return, with only a remote opportunity for additional sharing in profit. Both the § 47 rehabilitation credits and the preferred return were guaranteed as part of the transaction. The preferred return guarantee was funded. The Third Circuit determined that the investor’s return from the partnership was effectively fixed, and that the investor also had no meaningful downside risk because its investment was guaranteed. The Third Circuit agreed with the Commissioner’s reallocation of all of the partnership’s claimed losses and tax credits from the investor to the principal, holding that “because [the investor] lacked a meaningful stake in either the success or failure of

[the partnership], it was not a bona fide partner.” Id. at 463.