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If a person receives property as payment for services, whether for past or future services, the receipt typically constitutes gross income to the recipient. If a person performs services for a partnership or agrees to perform future services, and if the person receives a partnership interest as compensation for the past or future services, one might expect that receipt to cause the new partner to recognize gross income in an amount equal to the fair market value of the partnership interest. After all, if a corporation compensated someone for services rendered or to be rendered by transferring the corporation's own stock to that person, the receipt of the stock would be included in the recipient's gross income. One might question whether there is any reason to treat a partnership interest differently. In fact, the actual tax treatment of the receipt of partnership interests has had a checkered history, and there are valid reasons for excluding those interests from income in certain circumstances.


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