If a new person purchases the partnership interest of an existing partner, the new person assumes the same capital balance as the old partner, regardless of whether the amount paid is more or less than the existing partner's capital account balance.

Question

Quizplus · Accepted Answer

The new partner's capital balance is recorded at the existing partner's capital account balance, as the transaction is between the partners and does not affect the partnership's books.

If a New Person Purchases the Partnership Interest of an Existing