Partner A sells 5% of his partnership Profit and loss interest to partner B for $100 ( No hot assets at the time of sale).
How is this transaction reflected on the books of the partnership, if at all?
Thank you
Mostly it's not. Seller's proportionate share of capital sold gets transferred to buyer's capital account. Seller's ownership % on K-1 get changed.
Would the change be included in Schedule L and a contribution and distribution in M-2?
Increase and decrease on M-2, not contribution and distribution.
