Partnership Distribution Examples 2011

Partnership Distribution Examples 2011 - TAX 6317...

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TAX 6317 Disproportionate Distributions In Seven Steps 1. Classify Partnership Assets. Identify both §751 and Non§751 assets. 2. Determine distributee's interest in each asset both before and after the distribution. Remember, the partner’s interest after the distribution must be less than prior to the distribution. In the case of a total liquidation, the partner’s interest will be zero. 3. Prepare Partnership Exchange Table by subtracting the partner’s pre distribution percentage interest in each asset from the combination of the post distribution interest in each asset plus the amount received. USE MARKET VALUES FOR THIS TABLE - basis will enter the picture later. Note: as a check figure, the sum of changes for the partner’s interest in §751 assets and Non §751 assets must equal 0. That is, the positive sum in one category is offset by a negative sum in the other category. Be sure to treat reduction of liabilities as a cash distribution. 4. Identify the assets involved in the §751 (b) exchange (separate the assets sold from the assets purchased). The assets that are sold will be those items from the exchange table that decrease, and conversely, the assets purchased will be those assets in the exchange table that increase. For property within a class, only those assets that possess the same sign as the total for that category are
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Partnership Distribution Examples 2011 - TAX 6317...

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