Family 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.
Liquidation of the Family Partnership: The Taming of the ShrewdPractical Tax Lawyer
Citation InformationSamuel A. Donaldson, Liquidation of the Family Partnership: The Taming of the Shrewd, Prac. Tax Law., Win. 2006, at 47.