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Multi member LLC to single member LLC

Highlighted
Level 1
last updated ‎February 25, 2020 2:29 PM

Hi,

One LLC member buys the other two LLC members' interests.  This causes the LLC (taxed as a  partnership) to terminate.

On the final 1065, are the assets distributed to all partners and then the purchase takes place.  I.e. the purchase is not reflected on the partnership return?  That seems to be what Revenue Ruling 99-6 states.

Or, is the LLC member considered to contribute the cash for the purchase.  Then, that cash gets distributed to the selling partners and the rest of the assets are distributed to the buying partner?

Thank you.

 

  

 

 

 

 

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Highlighted
last updated ‎February 25, 2020 2:29 PM

Rev Rul 99-6 is the way I've always handled it.

View solution in original post

3 Replies 3
Highlighted
last updated ‎February 25, 2020 2:29 PM

Rev Rul 99-6 is the way I've always handled it.

View solution in original post

Highlighted
Level 1
last updated ‎February 25, 2020 2:29 PM

Thank you.

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Highlighted
Level 1
last updated ‎February 25, 2020 2:29 PM

Follow up question.  

Can partnership take bonus depreciation on an asset bought in same year that the asset is distributed when the partnership terminates?

I understand there will be recapture but i think the savings could be the self-employment tax.

Thank you.

 

 

 

 

 

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