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Selling Estate's interest in LLC

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    Selling Estate's interest in LLC

    Partner dies in 2018, his estate now owns the shares in 2019 when the LLC buys the shares for less than the capital account. Capital account is $2.4 Million and they settled for $2 Million paid over 3 years. I felt comfortable with partnership taxation until now. Not sure best way to handle this and whether a Sec. 754 election is mandatory or optional. Any advise is appreciated.

    #2
    754 election is mandatory IF it was made by the partnership now or any time before. You may not want it if it would be a step - down...

    Any hot assets left in partnership may change capital and ordinary gain(loss) assignment. If really a loss no installment treatment should be elected if a LOSS.

    Make sure the basis is good, as to computation.

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      #3
      Thank you!

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