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A partner sold his interest in an LLC to the other partner.

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A partner sold his...

A partner sold his interest in an LLC to the other partner. He still receives distributions, which are handled as payments to a retiring partner according to Internal Revenue Code §736(a). The question is: this ex-partner now wants the company to assign the payments to an LLC that he owns. Is this legal? Can we send the payments to the LLC?

Submitted: 8 months ago.Category: Tax
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11/16/2017
Tax Professional: Richard, Tax Attorney replied 8 months ago
Richard
Richard, Tax Attorney
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Tax Professional: Richard, Tax Attorney replied 8 months ago

Good afternoon. It is legal....as long as he provides you a signed Assignment of Interest document evidencing the assignment of his rights to these distributions to the LLC. Once you receive this signed Assignment, then you are legally entitled to direct the payments to the assignee LLC.

Thank you so much for allowing me to help you with your question. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as Good or Excellent (i.e., 4 or 5 stars)(hopefully Excellent/5 stars!). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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