DESCRIPTION
This module examines the federal income tax treatment of dispositions of partnership interests, including sales, redemptions, bargain sales, charitable contributions, and partial dispositions. Participants will compute gain or loss on partnership interest transactions and apply the hot asset rules to determine the proper characterization of ordinary income versus capital gain. The course addresses special rules affecting partnership interest sales, including related-party limitations, installment sale considerations, and reporting requirements. Practical fact patterns, a case study, and a completed Form 8308 are used to reinforce computation and reporting concepts.
LEARNING OBJECTIVES
- Distinguish between a sale of a partnership interest and a redemption of a partnership interest based on given fact patterns.
- Compute the total gain or loss recognized on the sale or redemption of a partnership interest.
- Calculate the basis, gain, and charitable deduction resulting from the bargain sale or charitable contribution of a partnership interest.
- Identify hot assets, and compute and report the portion of gain treated as ordinary income versus capital gain on the sale of a partnership interest.
- Evaluate the impact of related-party rules, installment sale provisions, and like-kind exchange limitations on partnership interest dispositions.
- Distinguish between a full sale and a partial sale of a partnership interest based on transactional fact patterns.
