Partners in Crane : Partnership Investment and Economic Risk

The author believes that, properly understood, the Crane rule in the partnership context requires amounts realistically at risk, and the probabilities of consequent losses, to govern the attribution of liabilities and award of additional basis to partners, even though the resulting rules may in some situations increase the basis of a partner who is not, as a matter of law, liable, or deny additional basis to a partner who is. This article sets forth solutions to many of the drafting problems raised by the new regulation project