Sale of Partnership Interest

[bpmcpa]

The limited partner sold their 95% ownership in a limited partnership, with a negative basis of $300,000 for $40,000 to the two remaining general partners. The sale took place on 1/2/2007.

Is this a technical termination?

Does a final return have to be filed for two days of 2007?

Assuming it is a technical termination, does the "new" partnership have to get a new TIN? And new organization documents? Will there have to be a new limited partner in order to be a limited partnership?

Will the remaining general partners have to report gain also?

I am so lost.....

[Bees Knees]

All you need is to sell 50% of the interest in a partnership to terminate. 95% is most definitely a termination.

As to the two days in 2007, I doubt anybody did anything on new years day, and I doubt anybody did anything on the day they sold their interests. See if the clients agree to treating 12/31/06 as the official date of termination, with 1/2/07 being the date the papers were signed.

As to having to get a new EIN, Reg. §1.708-1(b)(4) examples say the new partnership retains the EIN of the terminated partnership.