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CLIENT BOUGHT OUT HIS 50% PARTNER FROM THEIR RENTAL PROPERTY SO HE CAN LIVE IN THE PROPERTY. WHAT ARE THE TAX RAMIFICATIONS?

Joseph51
Level 1

CLIENT BOUGHT OUT HIS 50% PARTNER IN RENTAL PROPERTY TO LIVE THERE.  WHAT ARE THE TAX RAMIFICATION TO THE PARTNER THAT BOUGHT OUT THE OTHER PARTNER?

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abctax55
Level 15

Eh?  I can't quite hear you.

Consequences for you, or the individual who sold out?

Former Chump..umm... AllStar...This message was typed from 6 feet away so you can safely read it immediately.

If a post answers your question, click on *Accept as solution* for future searches

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2 Replies 2
abctax55
Level 15

Eh?  I can't quite hear you.

Consequences for you, or the individual who sold out?

Former Chump..umm... AllStar...This message was typed from 6 feet away so you can safely read it immediately.

If a post answers your question, click on *Accept as solution* for future searches

View solution in original post

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TaxMonkey
Level 8

The same as if he bought the house from anyone else.  He may be able to deduct qualified mortgage interest and property taxes.  He will have to carefully determine his basis in the home, as 50% will have partnership carry over basis and 50% will have adjusted basis based on what he paid his partner.


Of course the partnership return will be final, and is late unless an extension was filed.

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