Liquidation of the Family Partnership: The Taming of the ShrewdPractical Tax Lawyer
AbstractFamily partnerships and family limited liability companies are typically formed for reasons of efficiency, succession, and valuation. But all good things come to an end. Owners of a family partnership opt for liquidation in a variety of situations, usually following the death of the founding owner(s). Although most practitioners recall that the liquidation of a partnership is not a taxable event, few remember that as many as three Code provisions can come into play upon the liquidation of a family partnership. This article reviews those potential income tax traps and uses two examples to illustrate their coordination and application in a typical setting.
Citation InformationSamuel A. Donaldson, Liquidation of the Family Partnership: The Taming of the Shrewd, Prac. Tax Law., Win. 2006, at 47.