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

RG · ‎03-12-2022

Does this need to be reported on the tax return?

sjrcpa · ‎03-12-2022

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.

RG · ‎03-17-2022

Thanks for your help

sjrcpa · ‎03-17-2022

You're welcome.

The more I know, the more I don't know.

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

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