Tax partnership liquidating distributions


25-Sep-2017 18:49

Does it seem time to split things up and let each owner go his or her own way with a share of the LLC’s property?

If so, it may be time to dissolve and liquidate the company and distribute its assets to its owners.

ABC’s gain on the sale of property P is 0 (

Does it seem time to split things up and let each owner go his or her own way with a share of the LLC’s property?If so, it may be time to dissolve and liquidate the company and distribute its assets to its owners.ABC’s gain on the sale of property P is $600 ($1,100 sale price less ABC’s $500 basis).A’s share of ABC’s gain is $400 (A’s $300 built-in gain plus $100 (1/3 of ABC’s gain after allocation of A’s built-in gain to A))., the contributing partner must recognize gain determined as if the contributed property had been sold to the other partner at fair market value on the date of the distribution. At the time of contribution, A has a basis of $500 in property P, and property P has a value of $800. ABC’s initial basis in property P is $500, the same as A’s basis in property P.As a result, if property has been contributed to the LLC within seven years of the planned liquidation, the owners should take care to identify any built-in gain and to consider distributing any such contributed property in the liquidation to the contributing owner.In the alternative, the owners should consider the limited exception available for liquidating distributions in which the contributing owner receives an interest in the contributed property (and no other property).Are they tired of discussing its operations with you?Do you or the other owners covet the company’s assets?

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Does it seem time to split things up and let each owner go his or her own way with a share of the LLC’s property?

If so, it may be time to dissolve and liquidate the company and distribute its assets to its owners.

ABC’s gain on the sale of property P is $600 ($1,100 sale price less ABC’s $500 basis).

,100 sale price less ABC’s 0 basis).

An LLC’s owners may contribute property as well as money or services to the LLC.

Another is for marketable securities acquired by the partnership in certain non-recognition transactions (that is, transactions when an exchange results in no gain or loss for tax purposes).



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