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- Nov 20, 2017
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I have a situation where we are trying to sell a partnership interest to the other 50% owner. The selling partner has a zero basis on his k-1 but has debt basis of say $100,000 which is recourse debt. The buying partner has offered say 5,000 for the partnership interest and will assume the recourse debt. My question is does the debt basis stay in place, even though it it being assumed by the buying partner. example
Cash 5,000
Assumed debt 100,000
Total proceeds 105,000
Debt basis -100,000
gain on sale 5000
or
Cash 5,000
Assumed debt 100,000
Total proceeds 105,000
Debt basis 0
gain on sale 105,000
Cash 5,000
Assumed debt 100,000
Total proceeds 105,000
Debt basis -100,000
gain on sale 5000
or
Cash 5,000
Assumed debt 100,000
Total proceeds 105,000
Debt basis 0
gain on sale 105,000