Rev. Rul. 73-300

The partnership interest of a partner in a personal service partnership, which uses the cash receipts and disbursements method of accounting, consisted of his share of the partnership's income and "unrealized receivables" (as that term is defined by section 751(c) of the Internal Revenue Code of 1954).

During the partnership's taxable year, it made distributions of money to the partner in excess of the adjusted basis of his partnership interest (as determined under section 705 of the Code).

Held, the money distributed to the partner in excess of the adjusted basis of his partnership interest is, to the extent of the partner's interest in the unrealized receivables of the partnership, treated as having been made in exchange for his interest in the partnership's unrealized receivables in accordance with section 751(b)(1)(B) of the Code and is taxable to him as ordinary income.