Enrolled Agent Exam [Part 1] 80, Sale of Partnership Interest

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: • The gain on a partnership interest sale is split between ordinary income and capital gain. • A partner's basis, crucial for the gain calculation, must be adjusted for all K-1 items like income, losses, and distributions. • Section 751 "hot assets," which are unrealized receivables and inventory, are what trigger ordinary income treatment. • Any gain remaining after accounting for the hot asset portion is treated as a capital gain. • Partnerships must file Form 8308 to report the sale of an interest involving hot assets to both the IRS and the partner. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or Youtube Channel: https://www.youtube.com/@Open-exam-prep