Can you sell your interest in a partnership?
John Johnson
Updated on March 17, 2026
This means the ownership interest a partner has in a partnership is treated as a separate asset that can be purchased and sold. The general rule is the selling partner treats the gain or loss on the sale of the partnership interest as the sale of a capital asset (see IRC 741).
What is sale of interest?
Sale Interests means the Membership Interest of the Selling Member, the interest held by the Selling Member and its Affiliates in the TI/CapEx Reserve, and all TI/Cap Ex Notes, Covered Notes and Reposition Notes held by the Selling Member and its Affiliates.
How do you sell a limited partnership?
Master limited partnerships sell on public stock exchanges. You can buy or sell your MLP units through a broker for a fee. You can also sell the units privately. You must endorse the certificates with your signature, the name of the buyer and the date.
How does the sale of partnership interest work?
Sale of Partnership Interest. A Partner may sell some or all of its interest in the Partnership to an unaffiliated party only with the unanimous consent of the remaining Partner (s), and subject to the following provisions. Sample 1 Sample 2
What should be included in a purchase and sale agreement?
– Purchase and sale agreement should contain language regarding section 754 election if partnership interest is being purchased. – Purchase and sale agreement should allocate the purchase price to the assets purchased. – Purchase and sale agreement for the purchase of a partnership interest should determine the FMV of the partnership assets.
When does a third party buy a partnership interest?
When a third-party buys a partnership interest, the buyer generally assumes the selling partner’s share of indebtedness of the partnership, and thus, is added on to the sale price.
When to take selling partner’s share of partnership liabilities into account?
In addition, the selling partner’s share of partnership liabilities is taken into account as part of the total contract price and as year-of- sale payments only to the extent they exceed the selling partner’s basis in his partnership interest. Rev. Rul. 76-483, 1976-2 C.B. 131 .
