Partnership dissolving

[judys3]

Partnership 50/50 dissolving.  Partners are splitting assets.  How are the assets reported to the partner?

[Terry53029]

When splitting assets, the value of each asset needs to be determined accurately, often with the help of an appraiser, to ensure fair distribution. 

The terms of the partnership agreement will usually outline how assets are to be divided upon dissolution, including potential buy-out provisions. All income/loss will be reported to each member on K1

[judys3]

How are the assets distributed on the partnership return and how are what's received reported on their individual returns?

[Terry53029]

The partners have no gain, and don't report assets other than money. Just have to keep track of their basis for when they sell the asset. see this link for a good explanation of the rules.

https://www.thetaxadviser.com/issues/2024/aug/partnership-distributions-rules-and-exceptions.html.

[George4Tacks]

Also watch for a new form. https://www.irs.gov/newsroom/irs-releases-draft-form-7217-partners-report-of-property-distributed-by....

[judys3]

Thank you.  I did see the new form added and probably to catch those not reporting sales.