Question

Answer the following questions regarding termination of a partnership because of the sale or exchange of at least 50% interest in partnership profits and capital:

i.    Will the partnership need to get a new taxpayer identification number?

ii.   Will the partnership have to file a short period return?

iii. Will the termination end any 704(c) gain to the continuing partners?

iv. Will the termination end any loss carryovers under Code Sections 465, 469, and    704(d)?

v.   Will the tax basis of the assets in the hands of the new partnership be different       from their tax bases to the old partnership?

Answer 1

1. NO, the partnership will not need to get a new taxpayer identification number as he is register under Section 741 of the Internal Revenue Code . It apply to flip flop if a partners surrender of a certain percentage of his partnership interest constitues a termination of some interest.

2. NO, the partnership do not have to file for a short period return . they have to understand mutually and have to file double entry sytem .

3. A partnership shall terminate when the operations of the partnerships are discontinued and no part of any business, financial operation , or venture of the partnerships continues to be carried on by any of its partners in a partnership. Upon the death of one partner in a 2member partnership, the partnership shall not be considered as terminated if the estate or other successor in interest of the deceased partner continues to share in the profits or losses of the partnership business.