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Tax Planning for Partners, Partnerships, and LLCs
Copyright 2016, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

2-12 Tax Planning for Partners, Partnerships, and LLCs 12.syn


Selling or Exchanging a Partnership or LLC Interest


Jerold A. Friedland, JD, LLM

Chapter Summary


This chapter from Tax Planning for Partners, Partnerships, and LLCs, provides an overview of the federal regulations regarding taxation of the sale or exchange of a partnership or LLC interest. It details the computation of a selling partner's or member's gain or loss, with detailed examples and practice notes.

The chapter also reviews the characterization of a seller's gain or loss under federal tax regulations. It next describes what constitutes Internal Revenue Code § 751 property, including unrealized receivables and inventory. The chapter then outlines the methods for determining the effects of a sale or exchange on the partnership tax year, as well as the effects of a sale or exchange on a partner's loss deductions. It further discusses the exchange of partnership interests in a nonrecognition transaction. The chapter also covers the recharacterization of a sale or exchange of a partnership interest. It additionally sets forth the general rules regarding adjustment of the basis of a partnership or LLC interest following a sale or exchange.

Tax Planning for Partners, Partnerships, and LLCs (Matthew Bender) is a unique, all-in-one resource that covers both partner/partnership and limited liability company (LLC) tax issues. This publication makes available clear and direct explanations of some of the most staggeringly complex portions of the Internal Revenue Code, related regulations and rulings, and court cases. It is filled with examples and includes numerous computational illustrations. Tax Planning for Partners, Partnerships, and LLCs is packed with practice tips and cautions to alert you to tax planning opportunities and steer you around potential pitfalls.


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See Chapter 3 for information on tax accounting for partnerships and limited liability companies.

See Chapter 10 for information on liquidating payments to a retiring partner/member of a decedent's successor.

See Chapter 13 for information on acquiring a partnership or LLC interest by contribution.

See Chapter 14 for information on terminating a partnership or LLC.


See Business Organizations with Tax Planning (Matthew Bender) for full coverage on the formation and operation of various business entities, particularly partnerships and corporations, along with comprehensive tax analysis.

See Professional Corporations and Associations (Matthew Bender) for authoritative guidance on forming, operating, and changing ownership of a professional corporation or association.

See Bender's State Taxation: Principles and Practice (Matthew Bender) for full insight into the principles governing state tax law, compliance, and planning, with coverage of procedural and substantive law concerning corporate income taxation, personal income taxation, sales and use taxation, and property taxation.

See Tax Accounting (Matthew Bender) for comprehensive analysis of the accounting methods and periods available for tax purposes with in-depth explanation of their tax advantages and disadvantages.
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