Is a Non Refundable Extension Fee considered a Partnership's Ordinary Income

USA Discussion in 'General Tax Discussion' started by bretten, May 11, 2018.

  1. bretten

    bretten

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    Hello,
    A residential real estate rental partnership is in the process of selling off all of its properties/land in anticipation of ending
    the partnership. The sale is under contract and now is in the extension period. For allowing the extension by the Partnership,
    contractually, the Partnership will receive $300K as a "non-refundable extension fee".

    What would the receipt of this fee be classified as? Other income? Other net rental income?


    Where would this number be reported on the K-1? Line 11, other income?

    Thank you,
    B
     
    bretten, May 11, 2018
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  2. bretten

    MikeDallas

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    I would think it would be included as proceeds from the sale on Form 4797
     
    MikeDallas, Jun 3, 2018
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