Article
Taxing Selling Partners
March 31, 2019 | 94 Wash. L. Rev. 1
Emily Cauble
Abstract: When a partner sells a partnership interest, the resulting gain or loss is treated as
capital gain or loss, except to the extent that the partnership holds certain items whose sale
would result in gain or loss that was not capital. Seemingly, the purpose of this regime is to
prevent taxpayers from obtaining more favorable treatment by selling an interest in a
partnership than what would result if the partnership were to sell its underlying assets. But
given this legislative aim, the existing tax provisions produce results for taxpayers that are both
unduly favorable (in that sale of a partnership interest sometimes receives more beneficial
treatment than sale of underlying assets) and und…
