Level 2

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Sale of Partnership Interest to another Partner

Forum|Forum|2 years ago
February 27, 2024
1 reply
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Where is the worksheet on the allocation to other partners and date of disposition of another partner's share of profits and debts upon sale of interest?

Also, if another partner purchased the departing partner's share for $350k but the departing partner's basis is less than that, how do I account for that on the 1065?

This is uncommon in our practice so please forgive the basic questions.

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Best answer by sjrcpa

The ending capital account of the selling partner gets moved to the capital account of the buying partner.

Selling partner's outside basis is not reflected on the 1065.

Buying partner's $350K purchase price is not reflected on the 1065 unless a 754 election is made. It does become his beginning outside basis.

sjrcpaAnswer

Level 15

The ending capital account of the selling partner gets moved to the capital account of the buying partner.

Selling partner's outside basis is not reflected on the 1065.

Buying partner's $350K purchase price is not reflected on the 1065 unless a 754 election is made. It does become his beginning outside basis.

The more I know the more I don’t know.

Andrew90230Author

Level 2

Thank you so much! Where do I document the outside basis on the k-1? Or do I?

Level 15

Not on the K-1. Include in that partner's basis schedule if you're providing one.

The more I know the more I don’t know.