Amazing video as usual! Quick question: If a partner purchases a partnership interest and there is a 754 elections and a a 743b adjustment is made, let’s say to the only asset in the partnership (building), 1. On the 1065, does the step up in inside basis to the building show on the schedule L balance sheet, as well as the M2 capital account now required on tax basis? Or is the adjustment tracked outside the 1065 return 2. The excess depreciation deductions allocated to the purchasing partner under 743b Would be used with code 13V on the K1: that would also be reflected in taxable income/loss on the 1065 like any other income item right? I.E. be included on the M2 under net income/loss?
Very well explained. Based on what you have described presumably, partner Lime (selling partner) can ignore the unrecaptured 1250 amounts on the building depreciation previously claimed by Skittles?
Great explanation. If the partnership had $15,000 in basis in a building and $40,000 in liabilities with capital of negative ($25,000) and one partner wanted to sell a partial interest would it be taxable to the seller? Would the outcome be different in the buyer had not EROL on the $40,000? Thanks
If you have a 50% partnership interest with the company and you want to sell your 25% partnership interest to someone, Let's say you have $25K outside basis and you are selling it for $100K, Do you have to use 12,500 (50)% for your outside basis?
Thanks, if a partnership/LLC totally liquidates(no sales of assets, just property distributions of cash, land, depreciated equipment to all partners)the assets would have a basis equal to the capital accounts of the partners - since there is no gain on the complete liquidation of the interest does Section 751 apply in any way, could the Section 751 cause a gain? What if the equipment was distributed to only one partner, would the disproportionate distribution cause any Section 751 issues? Can you refer me to another of your videos that would address a complete liquidation of a partnership with hot assets?
Great questions! Yes 751 would apply in those cases. I do go over disproportionate distributions in this example: th-cam.com/video/sWaFN7hWzGY/w-d-xo.html
you made my understanding very smooth and up to the point! Thank you for sharing!
Amazing video as usual! Quick question:
If a partner purchases a partnership interest and there is a 754 elections and a a 743b adjustment is made, let’s say to the only asset in the partnership (building),
1. On the 1065, does the step up in inside basis to the building show on the schedule L balance sheet, as well as the M2 capital account now required on tax basis? Or is the adjustment tracked outside the 1065 return
2. The excess depreciation deductions allocated to the purchasing partner under 743b Would be used with code 13V on the K1: that would also be reflected in taxable income/loss on the 1065 like any other income item right? I.E. be included on the M2 under net income/loss?
1) tracked outside. 2) No it would not be on m2, reported outside.
@@ExploretheCode thank you!!
Very well explained. Based on what you have described presumably, partner Lime (selling partner) can ignore the unrecaptured 1250 amounts on the building depreciation previously claimed by Skittles?
Thanks for the question. On a sale transaction, yes.
Great explanation. If the partnership had $15,000 in basis in a building and $40,000 in liabilities with capital of negative ($25,000) and one partner wanted to sell a partial interest would it be taxable to the seller? Would the outcome be different in the buyer had not EROL on the $40,000? Thanks
Excellent explanation! Thanks for sharing!
Glad I could help!
If you have a 50% partnership interest with the company and you want to sell your 25% partnership interest to someone, Let's say you have $25K outside basis and you are selling it for $100K, Do you have to use 12,500 (50)% for your outside basis?
Yes.
Excellent. Thank you
Thank you, David. Glad I could help!!
Thanks, if a partnership/LLC totally liquidates(no sales of assets, just property distributions of cash, land, depreciated equipment to all partners)the assets would have a basis equal to the capital accounts of the partners - since there is no gain on the complete liquidation of the interest does Section 751 apply in any way, could the Section 751 cause a gain? What if the equipment was distributed to only one partner, would the disproportionate distribution cause any Section 751 issues? Can you refer me to another of your videos that would address a complete liquidation of a partnership with hot assets?
Great questions! Yes 751 would apply in those cases. I do go over disproportionate distributions in this example: th-cam.com/video/sWaFN7hWzGY/w-d-xo.html