If the selling partner is a C Corporation, the ACE adjustment must be made. The disposing partner is assumed to be giving up its percentage interest in each of the underlying assets. If the partnership holds Section 1245 or 1250 property, these assets are considered to be "unrealized receivables". See pages 10 - 12 of IRS Publication 541. (Link Below)
Received your reply. Thanks very much. Unable to find any references that specifically
says that installment sales of a partnership interest is subject to ACE adjustment. If you
can help. I will pay you an addtional amount for your time.
XXXXX XXXXX, CPA
Assuming the partnership has been reporting the ACE adjustment on K-1's each year, there would be an ACE adjustment on a sale. See page 10 of the instructions for Form 4626, relating to the ACE worksheet line 9. Link below.