Answered: "Treasury Stock" in a partnership

SweetLeaf · ‎05-16-2022

A partnership that I'm working on had a few partners sell their interest and part of that interest was sold back to the partnership. Is this allowed? Doesn't it need to flow thru to something?

PhoebeRoberts · ‎05-16-2022

The leaving partner's remaining capital account gets distributed among the remaining partners. (IRC 704 presumably tells you how; I don't know off the top of my head.) This is one of the reasons that capital accounts don't represent outside basis.

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PhoebeRoberts · ‎05-16-2022

The leaving partner's remaining capital account gets distributed among the remaining partners. (IRC 704 presumably tells you how; I don't know off the top of my head.) This is one of the reasons that capital accounts don't represent outside basis.

SweetLeaf · ‎05-16-2022

Thank you so much for your insight! I'll take a look at the rules

"Treasury Stock" in a partnership

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