Sequence of 99-6 transaction
Issues to consider
Cash basis partnerships and accrued liabilities assumed by the buyer
Tax issues to consider
Transaction costs
Section 751(a) reporting on an old return
Form 8308 to report the sale or exchange by a partner of all or part of its partnership interest
Form 8594 for sellers and purchasers to report a sale of a group of assets if goodwill or going concern value attaches to those assets and if the purchaser’s basis is determined solely by the amount paid
Holdco LLC pays cash for A and B’s interest in target LLC.
4.
A and B are treated as selling their partnership interest to Holdco LLC.
5.
Holdco is treated as purchasing A and B’s proportionate share of assets that are deemed distributed to A and B immediately prior to sale.
6.
B is treated as purchasing A’s proportionate share of assets that are deemed distributed to A immediately prior to sale.
3.
A is treated as selling its partnership interest to B.
2.
Organization B pays cash for organization A’s interest in Holdco LLC.
1.
Holdco
1065
SMLLC
Target
Holdco LLC pays cash for A and B’s interest in target LLC.
4.
A and B are treated as selling their partnership interest to Holdco LLC.
5.
B is treated as purchasing A’s proportionate share of assets that are deemed distributed to A immediately prior to sale.
3.
A is treated as selling its partnership interest to B.
2.
Organization B pays cash for organization A’s interest in Holdco LLC.
1.
1.
Holdco
1065
SMLLC
Target
Holdco LLC pays cash for A and B’s interest in target LLC.
4.
B is treated as purchasing A’s proportionate share of assets that are deemed distributed to A immediately prior to sale.
3.
A is treated as selling its partnership interest to B.
2.
Organization B pays cash for organization A’s interest in Holdco LLC.
1.
Holdco
LLC
B
A
LLC
Target
Cash
B is treated as purchasing A’s proportionate share of assets that are deemed distributed to A immediately prior to sale.
3.
A is treated as selling its partnership interest to B.
2.
Organization B pays cash for organization A’s interest in Holdco LLC.
1.
Holdco
1065
B
SMLLC
Target
A is treated as selling its partnership interest to B.
2.
Organization B pays cash for organization A’s interest in Holdco LLC.
1.
Holdco
1065
B
SMLLC
Target
Organization B pays cash for organization A’s interest in Holdco LLC.
1.
Holdco
1065
B
A
SMLLC
Target
Cash
Interest
Cash
Issues to consider
Sequence of 99-6 transaction
Sequence of 99-6 transaction
Holdco
1065
B
SMLLC
Target
Holdco
1065
SMLLC
Target
Issues to consider