[ITSTIMETOPASS]

So I get that the sale of a partnership interest is a capital gain or loss.

Partner’s Basis = Capital Account + Share of Liabilities

I read in Becker that ultimately the share of liabilities disappears because is cancels out but I’m not understanding the logistic behind this theory. Can someone explain?

Does that mean that:

Partner’s Capital Account – Amount received from buyer = G/L?

DONE

AUD: PASSED!
REG: Q4 2015
FAR:
BEC:

[Spartans92]

I'll try my best.. so when a partnership liquidates you generally recognize a Gain or Loss as if it is sold at FMV. so to compute you would take the amount received + the share of liabilities you are giving away because you no longer are held liable to those so it's as if you got cash for them. It is probably better when you have a question to reference. I do recall becker had 2 questions on a complete liquidation that I messed up on. I believe one did reference the use of capital account and the other did not and it asked for the gain or loss realized or something.

Sorry if I was not much help.

BEC - 76
REG- 67, 85
AUD-63, 74, 80!!
FAR-65, 62, 57, 79

3 down 1 more to go. BEC is on the Line 🙁

BEC- PASS

[Author]

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