le of Partnership Interest by Barry Evans

s statement is filed pursuant to Reg. $1\mathrm{.}751-1($a$)(3).$

On December $31$ of the current tax year, the taxpayer sold his one$-$third interest in the BDD Partnership to Dale Allen.

The taxpayer's basis in the partnership interest was $ $$

$$ including $ $q,$ for his share of the partnership's unrealized receivables in which the partnership had a $q,$ tax basis. Consequently, in his tax return for the year, Barry has recognized ordinary income of

$$ t$..$

In addition, this return reflects a $ $$ long$-$term capital gain on the disposition of the partnership interest.

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How would Barry's tax result differ if$,$ instead, BDD distributed $$90,000$ of its cash in liquidation of Barry's interest $($with the remaining rtners assuming Barry's share of partnership debt$)?$ Why is this result different from Barry's result when the interest is sold? The LLC$\text{'}$s erating agreement does not address payment of goodwill to the partner.

rry$\text{'}$s gain would be $\{.$ It would be classified as : $x$ of ordinary income and $ $x$ of sital gain. Because the payment for partnership goodwill is not provided for in the partnership agreement, Barry will report the amount $q,.$

e partnership $q,$

$q,$ deduct the $736(a)$ payment of $ $$