When determining a partner's gain on sale of his partnership interest, the selling partner must include her share of partnership debt in the amount realized.

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According to the IRS, when a partner sells their partnership interest, the amount realized includes not only the sale price but also their share of any partnership debt. This is because the selling partner is relieved of their obligation to repay that debt as a result of selling their interest. Therefore, they must include their share of the debt in the calculation of their gain or loss on the sale.

When Determining a Partner's Gain on Sale of His Partnership