A partnership terminates for federal income tax purposes if

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According to the Internal Revenue Code, a partnership terminates for federal income tax purposes if, within a 12-month period, there is a sale or exchange of at least 50% of the total interest in partnership capital and profits. This means that if more than 50% of the partnership interests are sold or exchanged during a 12-month period, the partnership is deemed to have terminated and a new partnership is considered to have been formed.

A Partnership Terminates for Federal Income Tax Purposes If