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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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.
Would the change be included in Schedule L and a contribution and distribution in M-2?
Increase and decrease on M-2, not contribution and distribution.
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