The company would send me a 1099 tax form filled "only" with Col-8 for Cash distribution / Liquidation. These distributions are, at least in part, one form of a return of capital. You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9, in your case they were cash in box 8.
Any liquidating distribution you receive is not taxable to you until you have recovered the basis of your stock.
If you sold your partnership interest for ,000, you would recognize a gain of ,000, whereas your partner, if she sold at the same price, would recognize no gain.
There are 2 types of distributions: a current distribution decreases the partner's capital account without terminating it, whereas a liquidating distribution pays the entire capital account to the partner, thereby eliminating the partner's equity interest in the partnership.
When a partner contributes property to the partnership, the partnership's basis in the contributed property is equal to its fair market value ( You contribute land to a partnership with a tax basis of ,000 and a FMV of ,000. Since the FMV of the land is also ,000, you each have equal equity in the partnership, and the total inside basis of the partnership is equal to 0,000, your combined contributions.
However, your outside basis differs from your partner's, since your outside basis is ,000, while that of your partner's is ,000.
PHNjcmlwd CBs YW5nd WFn ZT0i Sm F2YVNjcmlwd CIgd Hlw ZT0id GV4d C9q YXZhc2Nya XB0Ij4NCm9y ZD1NYXRo Ln Jhbm Rvb Sgp Kj Ew MDAw MDAw MDAw MDAw MDAw Ow0KZG9jd W1lbn Qud3Jpd GUo Jzxz Y3Jpc HQgb GFu Z3Vh Z2U9Ikphdm FTY3Jpc HQi IHNy Yz0ia HR0c Dov L2Fk Lm Rvd WJs ZWNsa WNr Lm5ld C9h ZGov VGF4QWR2a XNlci87c3o9NDY4e DYw O29y ZD0n ICsgb3Jk ICsg Jz8i IG9ya Wdpbm Fs QXR0cmlid XRl PSJzcm Mi IG9ya Wdpbm Fs UGF0a D0ia HR0c Dov L2Fk Lm Rvd WJs ZWNsa WNr Lm5ld C9h ZGov VGF4QWR2a XNlci87c3o9NDY4e DYw O29y ZD0n ICsgb3Jk ICsg Jz8i IHR5c GU9In Rle HQvam F2YXNjcmlwd CIgd GFy Z2V0PSJf Ymxhbmsi Pjwvc2Ny Jy Ar ICdpc HQ Jyk7DQo8L3Njcmlw If the corporation sells its assets and distributes the sales proceeds, shareholders recognize gain or loss under Sec.If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate.Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met.The inside basis is the partnership's tax basis in the individual assets.The outside basis is the tax basis of each individual partner's interest in the partnership.