https://www.taxtmi.com/caselaws?id=70266 Deemed gift treatment of property contributed as partnership capital requires proof that the transfer was otherwise than for adequate consideration. A difference between estimated market value and the capital-account credit does not alone establish inadequacy where the contributor retains an interest in the property through the firm and benefits from future appreciation. Reduction of a partner's share on admission of partners does not itself create a deemed gift when incoming partners contribute capital, assume liabilities, share losses, and the reconstitution is bona fide. The reduction must concern an impermissible transfer of existing property, supported by material showing lack of bona fides, rather than future profit-sharing rights. en-us Thu, 26 Nov 1987 00:00:00 +0530 Fri, 15 Apr 2011 11:12:35 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=70266 Deemed gift treatment of property contributed as partnership capital requires proof that the transfer was otherwise than for adequate consideration. A difference between estimated market value and the capital-account credit does not alone establish inadequacy where the contributor retains an interest in the property through the firm and benefits from future appreciation. Reduction of a partner's share on admission of partners does not itself create a deemed gift when incoming partners contribute capital, assume liabilities, share losses, and the reconstitution is bona fide. The reduction must concern an impermissible transfer of existing property, supported by material showing lack of bona fides, rather than future profit-sharing rights. Case-Laws Income Tax Thu, 26 Nov 1987 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=70266