So son is purchasing a partnership interest by assuming $360,000 debt. Is this equal to the FMV of the partnership interest? Or below?

Father's share of liabilities is reduced by $360,000. This is a deemed distribution to father . It's taxable to father to extent it exceeds father's basis in the partnership immediately before the transaction. Father's basis is not its value on the day he inherited it. It's just the starting point for the calculation.

Are there legal documents for all of this?

"The Fathers percent dropped to 5% with the son owning 95%" So how was this a partnership before this if father owned 100%?