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MequonCPA
MequonCPA, Certified Public Accountant (CPA)
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Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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is installment sale of a partnership interest subject to ACE

Resolved Question:

is installment sale of a partnership interest subject to ACE adjustment for AMT?
Submitted: 5 years ago.
Category: Tax
Expert:  MequonCPA replied 5 years ago.

DearCustomer-

 

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)

 

http://www.irs.gov/pub/irs-pdf/p541.pdf

 

MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2325
Experience: CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
MequonCPA and 6 other Tax Specialists are ready to help you
Customer: replied 5 years ago.

Hi Steve:

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.

 

Thanks,

 

XXXXX XXXXX, CPA

Expert:  MequonCPA replied 5 years ago.

Joe -

 

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.

 

http://www.irs.gov/pub/irs-pdf/i4626.pdf

 

 

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