Sec. 401. Partnership interests transferred in connection with performance of services
198 words·~1 min read·
/bill/116/hr/4321/ih/section-401A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Subsection
(c)of section 83 is amended by redesignating paragraph
(4)as paragraph
(5)and by inserting after paragraph
(3)the following new paragraph: Except as provided by the Secretary— In the case of any transfer of an interest in a partnership in connection with the provision of services to (or for the benefit of) such partnership— the fair market value of such interest shall be treated for purposes of this section as being equal to the amount of the distribution which the partner would receive if the partnership sold (at the time of the transfer) all of its assets at fair market value and distributed the proceeds of such sale (reduced by the liabilities of the partnership) to its partners in liquidation of the partnership, and the person receiving such interest shall be treated as having made the election under subsection (b)(1) unless such person makes an election under this paragraph to have such subsection not apply. The election under subparagraph (A)(ii) shall be made under rules similar to the rules of subsection (b)(2). . The amendments made by this section shall apply to interests in partnerships transferred after the date of the enactment of this Act.