Partners sale of partnership interest


C

Craig

Partnership is terminating. Partner has ($137,000) negative basis (as
appears on K-1). Partnership has held depreciable commercial rental
property since 1980. In the year of sale and termination the partner's
share will be a depreciation recovery--$207,000, capital gain--$162,000,
cash--$177,000. What are the tax implications if he takes cash or
elects (which is available) a 1031 exchange?

Thanks,
Craig
 
Last edited by a moderator:
Ad

Advertisements

D

David Woods

Craig said:
Partnership is terminating. Partner has ($137,000) negative basis (as
appears on K-1). Partnership has held depreciable commercial rental
property since 1980. In the year of sale and termination the partner's
share will be a depreciation recovery--$207,000, capital gain--$162,000,
cash--$177,000. What are the tax implications if he takes cash or
elects (which is available) a 1031 exchange?
A partner in a partnership cannot have a negative basis. He
either has basis or he does not. A partner also cannot do a
1031 on his partnership interest, as a partnership interest
is not property used in a trade or business or property held
for investment. So right there, I REALLY don't know where
you're going with this. To the extent any property received
exceeds the partner's basis, income will be recognized, the
character of which depends on what is received.

If you are a tax professional, it appears you are way over
your head. If you are not a tax professional, it is in your
best interests to get one yesterday.
 
Last edited by a moderator:

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top