The seller of a partnership interest may recognize ordinary gain on the sale, but will never recognize ordinary loss.

Name: The seller of a partnership interest may recognize ordinary gain on the sale, but will never recognize ordinary loss.
Brand: Quizplus
Rating: 4.8 (47 reviews)

Question

Quizplus · Accepted Answer

When a partnership interest is sold, the seller may recognize ordinary gain, which is taxed at the individual's ordinary income tax rate. However, if the sale results in a loss, the seller's loss is treated as a capital loss, not an ordinary loss.

The Seller of a Partnership Interest May Recognize Ordinary Gain