A partner may dispose of an interest in a partnership in different ways - sale, exchange, gift, death, or abandonment. This transaction unit focuses on the tax issues related to the sale of a partnership interest.
This CE/CPE course will look at the basics of partnership distributions and abandonments.
Abandoned partnership interests are treated as ordinary losses for tax purposes, assuming that no exchange has occurred. Avoiding an exchange is the key to ensuring more favorable ordinary loss treatment. An exchange can be triggered by receiving an actual (i.e., cash) or a deemed distribution.
The CE/CPE Tax webinar will first understand abandonments and their tax treatment of them and after, we will look at the basics of a partnership disposition.
Generally, when a partner sells his or her partnership interest, the transaction is treated as the disposition of a capital asset, and any gain from the sale is taxed at lower capital gains rates. A notable exception to this treatment occurs when the partnership holds “hot assets” detailed in IRC Section 751.
This CE/CPE course will also focus on more complex dispositions involving ordinary assets that fall under IRC 751(a) and (b). It will also cover the reporting required under 751(a) and (b) as well as the disposition of PTP interests.