If a new person purchases the partnership interest of an existing partner, and the amount paid is more or less than the existing partner's capital account balance, the partnership must record either a gain or a loss for the difference.

Question

Quizplus · Accepted Answer

The purchase of a partnership interest is a transaction between the buyer and the selling partner, not the partnership itself, so no gain or loss is recorded by the partnership.

If a New Person Purchases the Partnership Interest of an Existing