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Sale of Partnership Interest to another Partner

Andrew90230
Level 1

Where is the worksheet on the allocation to other partners and date of disposition of another partner's share of profits and debts upon sale of interest?

Also, if another partner purchased the departing partner's share for $350k but the departing partner's basis is less than that, how do I account for that on the 1065?

This is uncommon in our practice so please forgive the basic questions.

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sjrcpa
Level 15

The ending capital account of the selling partner gets moved to the capital account of the buying partner.

Selling partner's outside basis is not reflected on the 1065.

Buying partner's $350K purchase price is not reflected on the 1065 unless a 754 election is made. It does become his beginning outside basis.


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3 Comments 3
sjrcpa
Level 15

The ending capital account of the selling partner gets moved to the capital account of the buying partner.

Selling partner's outside basis is not reflected on the 1065.

Buying partner's $350K purchase price is not reflected on the 1065 unless a 754 election is made. It does become his beginning outside basis.


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Andrew90230
Level 1

Thank you so much!  Where do I document the outside basis on the k-1?  Or do I?

sjrcpa
Level 15

Not on the K-1. Include in that partner's basis schedule if you're providing one.


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