Discussion Question $11-6($LO$.9)$

What tax consequences result from the death of a partner? What collateral issues might arise?

a$.$ Complete the paragraph below regarding the tax consequences from the death of a partner.

If a partner dies, the partnership $.$

allocated. Post$-$death

that partner. The partner's pre$-$death share of $.$

is allocated to

is then

b$.$ Considering the collateral issues that may arise from the death of a partner, indicate which of the following is a collateral issue "Yes" or is

not $"$No$".$

The basis to the successor in interest is determined according to the treatment of the

partnership interest in the decedent's estate return.

A pre$-$existing agreement may force a sale of the interest to the other partners.

If the partnership has a $754$ election in effect, the adjustment will be under $$

$743($b$)$ if it relates to a transfer by will or if it is a transfer treated as a sale under a

buy$-$sell agreement and will be allocated to all partners.