Tax and Accounting Implications Following a Partner's Death: Financial and Operational Considerations

Description

The death of a partner often brings unanticipated and unwelcome tax and accounting complications to the partnership, the partner’s estate and heirs, as well as the partner’s final income tax return. When a partner dies, the tax year of the partnership closes for that partner, requiring tax allocations and entries to the partnership’s books. In many instances, a partner’s death requires serious adjustments to how, or even if, the partnership will do business in the future.

Disposition of a partnership interest due to a partner’s death can involve basis elections to the successor partner’s interests, as well as questions as to how any suspended losses carried forward by the deceased partner must be treated for tax purposes. Tax advisers need to fully understand the consequences that arise when a taxpayer holding a partnership interest dies. By doing pre-mortem as well as post-mortem tax planning, tax advisers can position a taxpayer to avoid unnecessary complexities and negative tax consequences for his heirs and successors.

Listen as our experienced panel provides detailed guidance on the operations, accounting and tax impact of the death of a partner on the partnership and its existing partners, the heirs and successor partners, and the tax matters of the decedent in this in-depth webinar.