How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Jonathan Tierney Your Own Question
Jonathan Tierney
Jonathan Tierney, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 307
Experience:  Tax Accountant at Praxair, Inc.
51959094
Type Your Tax Question Here...
Jonathan Tierney is online now
A new question is answered every 9 seconds

Stephen, I own 60% of a Tx LP within another Tx LP. I'm wanting

Customer Question

Stephen, I own 60% of a Tx LP within another Tx LP. I'm wanting to 1031 my share for oil & gas WI and NRI. how do I take partner out & does undrilled interest count? Ron
Submitted: 1 year ago.
Category: Tax
Expert:  Stephen G. replied 1 year ago.
Hello, my name is***** & I'll be helping you today. My goal is to give you a complete & accurate answer that you can understand.
I'm sorry but I'm not an expert as to what constitutes a like-kind exchange when it comes to Oil & Gas Proprieties; particularly in terms of undefined direct LP interests & subsidiary LP interests.
Initially, it would not seem to qualify under 1031, but as I said I'm not able to be certain as I am not an Oil & Gas expert. I will opt-out and see if there is another expert available who does work with Oil & Gas exchanges. Generally, you would find such experts in Oil exploration areas, in Texas, Oklahoma, & California.
.
Expert:  Jonathan Tierney replied 1 year ago.
Hello, my name is ***** ***** I'll be helping you today. My goal is to give you a complete & accurate answer that you can understand.
Partnership interest are not eligible for an IRC 1031 exchange. See IRS Publication 544: http://www.irs.gov/publications/p544/ch01.html#en_US_2014_publink100072443
You can consider distributing the partnership assets to yourself and/or the other partner. How this is done depends on your partnership agreement. As a 60% owner you may have the right to buy the other partner out or liquidate the partnership and have property interests distributed to all partners. You did not mention if you were a general partner or just a limited partner. If you are a general partner you may have the authority to liquidate the partnership. However, all the rights of the general and limited partners would be spelled out in the contract, and each agreement is unique.
If you want you can contact me and I can also review the partnership agreement to determine what your options are.
I hope this answers your question... Let me know if I can explain this further. Thanks.

Related Tax Questions