Money or property withdrawn by a partner in anticipation of the current year's earnings is treated as a distribution received on the last day of the partnership's tax year. A partner's adjusted basis in his or her partnership interest is decreased (but not below zero) by the money and adjusted basis of property distributed to the partner.See Adjusted Basis under Basis of Partner's Interest, later. A partnership generally does not recognize any gain or loss because of distributions it makes to partners.If you receive distributions from the corporation in complete liquidation, you must divide the distribution among the blocks of stock you own in the following proportion: the number of shares in that block over the total number of shares you own.Divide distributions in partial liquidation among that part of the stock redeemed in the partial liquidation.Whether you report the gain as a long-term or short-term capital gain depends on how long you have held the stock.See If you acquired stock in the same corporation in more than one transaction, you own more than one block of stock in the corporation.The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis (determined under section 1012 or other applicable sections of this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses)), adjusted as provided in section 1016.The C Corp I am working with just went thru an asset sale of the company and will report the gain on sale. After all entries are made, gain on sale, taxes paid, etc we have left common stock and retained earnings. The basis of property shall be the cost of such property, except as otherwise provided in this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses).
If any gain or loss from the distribution is recognized by the partner, it must be reported on his or her return for the tax year in which the distribution is received.
On December 31, 2011, after receipt of his share of\r\npartnership income, Clark sold his interest in a limited partnership\r\nfor ,000 cash and relief of all liabilities. How much long-term capital gain should Roe\r\nreport in 2012 on the sale of his partnership interest?