I have a Partnership tax return with many K1s which partners all having interest in land. Each partner has a capital account and their interest ranges from .75% to 9%. One of the partners abandoned his interest of 4.545455% and had a Capital Account of $295,791. How do I treat this item when it comes to the other partners? They will all have an increased % of ownership and their capital accounts will be increased but is their a gain to the other partners? Do they receive taxable income in 2014 due to the increase?
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