Partnership Liquidation: Sale of Assets and Distribution of Cash

Summary

This template serves as a guide for clients in contracts and transactions involving partnership liquidations, including the sale of assets and distribution of cash. This template contains practical guidance, drafting notes, and an alternate clause. The template outlines three basic ways to liquidate, including: the sale of the partnership assets and the distribution of cash among the partners; the distribution of assets (cash and property) of the partnership to your partners proportionately; or the disproportionate distribution of assets to partners by considering asset value upon liquidation. For a full listing of key content covering pertaining to the taxation of pass-through business entities such as partnerships, limited liability companies (LLC) and S corporations, see Partnership and other Pass-Through Entities Taxation Resource Kit. For information on the important tax factors that distinguish a partnership from other entities, a discussion of other significant tax provisions unique to the partnership form, and an analysis of the new audit rules that apply to partnerships for tax years beginning after December 31, 2017, and how these new rules affect the traditional conceptions of the partnership form, see Taxation Basics for Partnerships and LLCs.