Corpus

Real estate partnership holding office building (FMV $30M, basis ~$38M, nonrecourse debt $50M) negotiated workout with lender. After learning COD income would trigger unfavorable minimum gain chargeback allocation, partnership pivoted from debt reduction to deed-in-lieu structure to convert $15M ordinary COD income into $12M capital loss under IRC § 7701(g).

Partner contributed appreciated real estate (FMV $80M, basis $50M, $30M built-in gain) for 20% interest in fund partnership; outside investors contributed $320M cash for 80%. Partnership agreement elected curative allocation method under Section 704(c), intending to reallocate depreciation from subsequently acquired properties to cure contributing partner's ceiling rule distortion over 5-7 year holding period.

Contributing partner transferred software IP with $50M claimed FMV and $5M basis to venture fund in exchange for 25% capital and 20% carry, creating $45M built-in gain. Partnership elected remedial allocation method under Treas. Reg. §1.704-3(d) to provide institutional LPs with offsetting ordinary deductions while allocating licensing income to contributing partner, avoiding ceiling rule distortions that would arise under traditional method.