Common use of Partnership Interests Clause in Contracts

Partnership Interests. In 1993, S and two of its shareholders contribute cash to form a general partnership, PRS. S re- ceives a 50 percent interest in the capital and profits of PRS. S formed PRS to indirectly invest in marketable stocks and securities. The only assets of PRS are the stock and se- curities, and certain real and tangible per- xxxxx property. In 1994, S needs cash in its business and sells its partnership interest at a gain rather than having PRS sell the mar- ketable stock or securities that have appre- ciated. Under paragraph (c)(4)(ii)(B)(4) of this section, the gain on S’s disposition of its in- terest is PRS is treated as gain from the sale or exchange of stock or securities to the ex- tent of the amount the distributive share of gain S would have received from the sale of stock or securities held by PRS if PRS had sold all of its stock or securities at fair mar- ket value at the time S disposed of its inter- est in PRS.

Partnership Interests. In 1993, S and two of its shareholders contribute cash to form a general partnership, PRS. S re- ceives a 50 percent interest in the capital and profits of PRS. S formed PRS to indirectly invest in marketable stocks and securities. The only assets of PRS are the stock and se- curities, and certain real and tangible per- xxxxx property. In 1994, S needs cash in its business and sells its partnership interest at a gain rather than having PRS sell the mar- ketable stock or securities that have appre- ciated. Under paragraph (c)(4)(ii)(B)(4) of this section, the gain on S’s disposition of its in- terest is PRS is treated as gain from the sale or exchange of stock or securities to the ex- tent of the amount the distributive share of gain S would have received from the sale of stock or securities held by PRS if PRS had sold all of its stock or securities at fair mar- ket value at the time S disposed of its inter- est in PRS.