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R
RG62_2
Level 3
March 12, 2022
Question

I have a partner who got paid $13,000 for a Lawsuit settlement. The check says Capital account payout.

  • March 12, 2022
  • 1 reply
  • 9 views

Does this need to be reported on the tax return?

This topic has been closed for replies.

1 reply

sjrcpa
sjrcpa
Level 15
March 12, 2022

Sounds like this was received in exchange for his partnership interest.

The sale of a partnership interest is reported on Schedule D/Form 8949. There may be an ordinary income component to the extent of his share of the partnership's hot assets.

The more I know the more I don’t know.
    R
    RG62_2Author
    Level 3
    March 17, 2022

    Thanks for your help

      sjrcpa
      sjrcpa
      Level 15
      March 17, 2022

      You're welcome.

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