Transfer of partnership interest

[ednapa520]

Have 3 partners in partnership - one partner leaving the partnership and is transferring his total share to the other 2 partners - capital account to be transferred is $317,709 and will be transferred to the other 2 partners who have negative capital accounts of ($265,146) and ($185,726) - no consideration in this transaction, just a transfer of the $317,709 to the other 2 partners.  On Schedule K-1 worksheet, input the amounts to "Other Adjustments" but did not flow through to the K-1 Partner's Share of Income, Deductions, etc, Part II, L, Other Increases/Decreases - how do I input this transaction so that it flows through to all the relative lines of the tax return - & any suggestions on how to word the explanation to be attached.  Thank you.

[George4Tacks]

I think the partner is selling their interest to the other partners for his Net Basis in the partnership. Look into https://www.thetaxadviser.com/issues/2024/feb/a-look-at-revised-form-8308.html as being a new form to deal with. 

The sale will need to be dealt with on the 1040. 

[sjrcpa]

I don't do ProSeries but I call this Transferred Capital.

You probably have to specially allocate it.