A Partner’s Cash Distribution Exceeds Basis: Capital Accounts Cannot Shelter the Gain
Compute outside basis immediately before a distribution and include debt changes.
TOPIC COLLECTION
Partnership basis
A focused reading path from Entity Economics. Start with the question closest to your situation, then review the linked sources and documentation steps.
A Distribution Changes the Partnership’s Remaining Asset Basis: Review Section 734
The recipient is not the only taxpayer affected by an in-kind withdrawal.