Which of the following transactions will not result in termination of a partnership for Federal tax purposes?
A)The partnership is incorporated.
B)A 70% interest in partnership capital and profits is sold to a third party purchaser.
C)Cash is distributed in liquidation of a 60% partner's interest in a five-partner partnership.
D)A 40% interest in partnership capital and profits is sold to the other partner in a two-partner partnership.
E)None of the above.

Question

Quizplus · Accepted Answer

A partnership is not terminated for tax purposes when a partner's interest is liquidated, even if it is a majority interest, as long as the partnership continues with the remaining partners.

Which of the Following Transactions Will Not Result in Termination