KateLang

The partner sold the interest in the partnership to just one other partner. However, the distribution in question is not what the partner received as a buy-out. The distribution received was part of a normal distribution that all of the partners had received. Obviously, the other partners still had a basis in the partnership, so there is no question as to how their distributions are to be reported.

I agree that it does appear that an override of the rule occurred. With this in mind, would a 1099 need to be issued for the distribution or should the partner's ending basis be adjusted to the actual date of the sale as opposed to the effective date? I really appreciate the attention that you have given this matter.

The partner sold the interest to another partner mid-year, and the distribution occurred prior to this point. However, the effective date of transferring interest in the partnership was Jan 1st. per the articles of organization of the partnership.

The scenario is that a partner sells interest in partnership on Jan 1st. However, during the year a distribution is still made to the individual. How should this be reported on the K-1 to be properly taxed? Would a 1099 also need to be issued?