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When one partners buys out the other partner in a partnership, is the partnership automatically dissolved?

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Level 1

1.  Parner A buys out Partner B for $10,000.  Since Partner A is now the sole owner of the company can he file a final return for partnership and file as a sole proprietor?  

2.  Partner B tax basis is $11,222. Does this create a loss for Partner B? 

3.  What if X purchases Partner B's interest for 10,000.  Does Partner X assume Partner B's basis at $11,222 or $10,000?  

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Level 15

1. Yes

2. yes

3.X's basis will be $10,000. He gets B's ending capital account though.


ex-AllStar

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1 Reply 1
Highlighted
Level 15

1. Yes

2. yes

3.X's basis will be $10,000. He gets B's ending capital account though.


ex-AllStar

View solution in original post

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