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Partial Sale of a partnership interest

nycpa76
Level 1

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

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3 Replies 3
sjrcpa
Level 15

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.


ex-AllStar
nycpa76
Level 1

Would the change be included in Schedule L and a contribution and distribution in M-2?

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sjrcpa
Level 15

Increase and decrease on M-2, not contribution and distribution.


ex-AllStar