Liquidating distribution for partnership

Are they tired of discussing its operations with you?

The significant issue is that upon the distribution in complete liquidation, the adjusted tax basis for the distributed property may be less (and sometimes much less) than the tax basis in the hands of the partnership.Liquidating distributions may be accompanied by other retirement payments that do not represent consideration for the withdrawing partner's interest in partnership property, and may be deferred compensation, or other claims against past or future partnership income. Distribution of Property Subject to a 743(b) Basis Adjustment D. When the withdrawal is a result of death, there may be other collateral income and transfer tax consequences. Allocation of Section 734(b) Adjustment Among Partnership Assets a. Has it outlived its usefulness as an asset management, asset protection, or, dare we say it, wealth transfer vehicle?Are you tired of discussing the company’s operations with the other owners?This article demon­strates how to ensure that such distributions do not cause unexpected tax results.


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