[Verse 1]
When partners gather, assets in their hands
Section 721 says "no tax today"
But watch for services and debt demands
Exceptions lurk along the contribution way
Partnership agreement sets the stage
Income and losses shared by written page
[Chorus]
Seven-oh-four substantial economic effect
Three-part test to keep allocations in check
Capital accounts and liquidation rights
Partner bears the risk through financial nights
K-1 forms dancing, basis climbing high
Partnership taxation beneath the sky
[Verse 2]
Guaranteed payments flow like steady streams
Seven-oh-seven-c defines the rule
Partner gets paid regardless of the dreams
Outside basis tracks each partner's tool
Add income, contributions to the score
Subtract distributions, losses and much more
[Chorus]
Seven-oh-four substantial economic effect
Three-part test to keep allocations in check
Capital accounts and liquidation rights
Partner bears the risk through financial nights
K-1 forms dancing, basis climbing high
Partnership taxation beneath the sky
[Bridge]
Seven-fifty-two debt allocation game
Recourse and nonrecourse split the claim
Inside basis separate from outside view
Seven-fifty-four election makes them true
Hot assets lurk in seven-fifty-one
Ordinary income can't be outrun
[Verse 3]
Distributions current, seven-thirty-one
Liquidating payments when the partner's done
Disguised sales hide beneath the surface gleam
Seven-oh-seven guards the tax regime
Anti-abuse rules patrol the border
Partnership substance must follow proper order
[Outro]
From formation through the final sale
Partnership tax law tells its tale
Basis tracking, allocations clean
Subchapter K runs the whole machine