AMENDING PARTNERSHIP AGREEMENT WON'T CAUSE INCOME REALIZATION.

UIL Number(s) 0702.00-00, 0704.00-00

                                             Date: February 23, 1998

FACTS

[2] The Partnership conducts a medical practice and currently owns a units in Limited (the Units). Limited is a limited partnership that provides management services to the Partnership and other medical groups.

[3] Under the general partnership agreement (the Agreement), the Partnership does not have a fixed method to determine the current and future allocations of the Partnership's profits or losses from its disposition of the Units. The Partnership's profits and losses from the disposition of the Units are currently allocated based on the determinations of an executive committee, subject to certain minimum allocation requirements.

[4] Because of the financial success of Limited, the partners of the Partnership believe it is important to have a method of reasonably determining their respective shares of the proceeds from Partnership's disposition of the Units. To accomplish this, the Partnership intends to amend the Agreement to provide a mechanism to determine each partner's minimum share of the proceeds from the Partnership's disposition of the Units (the Amendments). As explained above, the potential gain or loss that would be realized from the Partnership's disposition of the Units has not been allocated among the partners and is not reflected in the capital account of any partner.

[5] Under the Amendments, until a Liquidity Event occurs, the Partnership retains the legal title to the Units, all distributions and other profits on the Units will be paid to the Partnership, and to the extent the executive committee of the Partnership determines the distributions and profits on the Units are to be distributed to the partners, the allocation of any such items will be made by the executive committee under the terms of the Agreement. A Liquidity Event is any one of the following events: (1) Limited makes an initial public offering of its equity securities through a registration statement under the Securities Act of 1933, (2) Limited or its owners enter into a transaction with a party that, prior to such transaction, does not own an interest in Limited so that such party acquires equity securities of Limited resulting in such party having the power to elect a majority of Limited's governing body, or (3) Limited enters into a merger, reorganization, combination or acquisition transaction with another company and in such transaction the equity securities of Limited outstanding immediately prior to such transaction do not constitute, or are not converted into or exchanged for, a majority of the equity securities of the resulting entity outstanding immediately after such transaction. On the occurrence of a Liquidity Event, the Partnership will transfer to each partner the partner's share of the Units.

LAW

[6] Section 702(a) provides that each partner must take into account the partner's distributive share of the partnership's profit or loss.

[7] Section 704(a) provides that a partner's distributive share of income, gain, loss, deduction, or credit is determined by the partnership agreement except as otherwise provided in chapter 1 of subtitle A of title 26.

[8] Section 704(b) provides that a partner's distributive share of income, gain, loss, deduction, or credit (or item thereof) is determined in accordance with the partner's interest in the partnership (determined by taking into account all facts and circumstances) if (1) the partnership agreement does not provide for the partner's distributive share of income, gain, loss, deduction, or credit (or item thereof), or (2) the allocation to a partner under the agreement of income, gain, loss, deduction, or credit (or item thereof) does not have substantial economic effect.

[9] After applying the law to the facts represented, we rule that merely adopting the Amendments will not result in the realization of income by the Partnership, Limited, or any of their respective partners.

[10] Except as specifically set forth above, we express no opinion concerning the federal tax consequences of the facts described above under any other provision of the Code, including, but not limited to, whether the allocations will have substantial economic effect under section 704(b). This ruling is directed only to the taxpayer who requested it. Under section 6110(j)(3), this ruling may not be used or cited as precedent.

                                   Sincerely yours,