Sale of Partnership Interest

[S T]

Taxpayer sold his partnership interest to another party, not the partnership

Breakdown of the sales price included

value of Inventory and Cash

share of the depreciable items

and relief of the accounts payable

Where do I report the inventory and cash as ordinary income?

Sandy

[S T]

??

Would be form 4797???

Sandy

[BHoffman]

Sandy, you have come to the rescue so many times for many of us. I have been trying to find your answer throughout "break times" during the day and I'm coming up empty so far.

Here's a bump.

[Gretel]

I agree with BHoffman and tried to find an answer. I could not find one so far. I think it needs to be reported on Sch. D, since it is the partnership interest that is sold and not a business asset. See Schedule D instructions.

I think the cash received is taxed at cap.gains rate, only hot assets are not.

[BHoffman]

Where do you report the ordinary income from the hot assets? I found Sch D was good for the Capital Gain stuff, but cannot find where to report the ordinary income.

[Gretel]

I would enter it as a short term sale, then it automatically calculates at the regular tax rate. Don't burn my hands if this is wrong and maybe someone who actually knows will educate us.

[S T]

Thanks

Gretel and B Hoffman, Thank for taking time out of your busiest time and on crunch at that. You just don't know how much I appreciate it

I had an older Partnership Workbook, and started digging when no one was responding, I just knew Sched D wouldn't work as those are Capital, and the next chocied was 4797, and it states in the instructions (not for invenotry, etc).

So in this "old" material I found you report these on Line 21 as "Other Income" The calculation is a little complicated, so not so sure about that

Go Figure. That is what I am doing and trying to encourage the taxpayer to go on extension with what I have calculated, but he can be so "stubborn"


XOXOXO

To Both Gretel and B Hoffman

Sandy