Discussion:Taxation of Gift of Partnership Interest and Basis
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Discussion Forum Index --> Tax Questions --> Taxation of Gift of Partnership Interest and Basis
| 5 February 2007 | |
| I have an LLC taxed as a partnership with 2 members. Member #1 is majority member and he intends to gift a portion of his interest to his son-in-law.
I am concerned about gift tax and also potential income tax. 1. I assume we use FMV of the business on date of gift x % of interest gifted for the gift tax return. 2. Is there any income tax (is it treated as a "sale" of interest) to my majority member client? 3. What will be the adjustment to his capital account and to his member basis? 4. What will be the adjustment to the new member's capital account and to his member basis? | |
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