Discussion Question LO
What tax consequences result from the death of a partner? What collateral issues might arise?
a Complete the paragraph below regarding the tax consequences from the death of a partner.
If a partner dies, the partnership
allocated. Postdeath
that partner. The partner's predeath share of
is allocated to
is then
b Considering the collateral issues that may arise from the death of a partner, indicate which of the following is a collateral issue "Yes" or is
not No
The basis to the successor in interest is determined according to the treatment of the
partnership interest in the decedent's estate return.
A preexisting agreement may force a sale of the interest to the other partners.
If the partnership has a election in effect, the adjustment will be under
b if it relates to a transfer by will or if it is a transfer treated as a sale under a
buysell agreement and will be allocated to all partners.
