The sale of a partnership interest generally results in a capital gain or loss for the selling partner. However, if the partnership holds inventory items or unrealized receivables (which includes depreciable property) at the time of the sale or exchange, a portion of the gain or loss will be ordinary gain or loss. The concept of the aggregate theory and Section 751 “hot assets” will be discussed along with the proper valuation methods to employ when performing the “hypothetical sale” computation required as part of every sale of a partnership interest.
Key talking points:
IRS
Senior Manager
Michael Halpert is a senior manager in LB&I’s Pass-Through Entities Practice Area over its tax shelter promoter program and campaign development team. The campaign development team evaluates campaigns involving pass-through entities and was instrumental in getting the Sale of Partnership Interest campaign approved and to the field.
IRS
Senior Revenue Agent
Andrew Dux is currently a senior revenue agent with the partnership and TEFRA practice network and has been with the IRS for 14 years. Andrew obtained his Bachelor’s Degree and Master of Professional Accountancy Degree from the University of Nebraska, Lincoln. Andrew has been serving as a Subject Matters Expert co-leading the Sale of Partnership Interest Campaign for the last two years.
IRS
Subject Matters Expert
Geoff Gaukroger is currently a Subject Matters Expert in the partnership and TEFRA practice network and has been with the IRS for 17 years. Prior to joining the IRS Geoff worked in public accounting for 5 years and 7 years in the corporate world. Geoff is a licensed CPA in the State of Oregon and has a Bachelor’s and a Master’s Degree in Accounting both from Washington State University.
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