Tax partnership liquidating distributions
Another is for marketable securities acquired by the partnership in certain non-recognition transactions (that is, transactions when an exchange results in no gain or loss for tax purposes).
Another is for marketable securities that were not marketable securities when acquired by the partnership.
Has it outlived its usefulness as an asset management, asset protection, or, dare we say it, wealth transfer vehicle?
Are you tired of discussing the company’s operations with the other owners?
But what if the contributing owner has transferred his or her interest in the LLC to a successor?
Such transfers are common in family LLCs and not uncommon in other LLCs.
In addition, there is a helpful limitation on the gain a partner must recognize upon receiving a distribution of a marketable security.Does it seem time to split things up and let each owner go his or her own way with a share of the LLC’s property?If so, it may be time to dissolve and liquidate the company and distribute its assets to its owners.The concept of taxing the contributing owner on the built-in gain in contributed property also extends to of the distribution, but the calculation is more complicated.A partner who receives a distribution of property (other than money) must recognize gain in an amount equal to the lesser of (i) the excess distribution or (ii) the partner’s net precontribution gain.
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Financial instruments convertible into money or marketable securities are also marketable securities, as are financial instruments the values of which are determined by reference to marketable securities.