"Steve" <artatax[at]netzero.net> wrote:

- quote -

I go with door number 1.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Here's a Situation that I am dealing with:
Two Brothers each have 50/50 partnerships with a relative.
Brother A and the relative (PartnershipA) own Store A
Brother B and the relative (PartnershipB) own store B
- but - brother A works at and manages StoreB not StoreA and
vice versa for many years.

This year they decided to exchange ownership of the stores
so that they each own the store that they manage. So now
BrotherA owns store B with his relative, the store he
manages and vice versa. They changed the names on the Liq
Lics, with the state Sales tax authority, etc. They tell me
that no money changed hands, that they swapped even. The
balance sheets obviously are not equal.

So now I have to prepare partnership returns and 1040s for
both partnerships, both brothers and the relative. My
question is - what happened here?

At the Parntership level:
Did both partnerships terminate because a 50% partner left?
or
Do the partnerships stay intact but now own different stores?

or ?

Would sure appreciate your thoughts and ideas.

Steve

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