Under IRC Section , when a partner sells his interest, he is entitled to capital gain treatment, except as provided in IRC Section
partnership property (including money) other than property described in subparagraph (A)(i) or (ii) in exchange for all or a part of his interest in partnership.
With a Section Transfer, we are usually talking about a commercial building or an appreciable asset. For this article, we are going to stick.
nd, Partnership Transactions—Section Property, analyzes the federal income tax consequences of (1) a sale or exchange of a partnership interest.
The “hot asset” re-characterization provisions of IRC frequently result of Section property subject to ordinary income reclassification.
In , Section was passed to “prevent the conversion of potential ordinary income into capital gain by virtue of transfers of partnership.
Cf I.R.C. § (c)(1)(A)(i) (limiting basis of distributed hot asset to basis in partnership's hands). 26The only example in the section regulations illustrating.
ABC holds hot assets, otherwise referred to as Sec. property or ordinary income property. A's outside basis of his interest in ABC is $, He sells his .
(a) Sale or exchange of interest in partnership. The amount of any money, or the fair market value of any property, received by a transferor partner in exchange.