Common use of General Partner Interests Clause in Contracts

General Partner Interests. (i) In gen- eral. Except as provided in paragraph (c)(4)(ii)(B)(4)(ii) of this section, if an S corporation disposes of a general part- ner interest, the gain on the disposi- tion is treated as gain from the sale of stock or securities to the extent of the amount the S corporation would have received as a distributive share of gain from the sale of stock or securities held by the partnership if all of the stock and securities held by the part- nership had been sold by the partner- ship at fair market value at the time the S corporation disposes of the gen- eral partner interest. In applying this rule, the S corporation’s distributive share of gain from the sale of stock or securities held by the partnership is not reduced to reflect any loss that would be recognized from the sale of stock or securities held by the partner- ship. In the case of tiered partnerships, the rules of this section apply by look- ing through each tier.