BarbriSFCourseDetails
  • videocam Live Online with Live Q&A
  • calendar_month October 31, 2025 @ 1:00 p.m. ET./10:00 a.m. PT
  • signal_cellular_alt Intermediate
  • card_travel Tax Preparer
  • schedule 110 minutes

Redemptions of Partnership Interests: Sections 736(b) vs. 736(a)

Installment Sales, Hot Assets, OBBBA Modifications to SALT Caps

$197.00

This course is $0 with these passes:

CPE
ALL
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Description

The acquisition of a partner's interest directly by the partnership is a redemption. Although the partner and partnership may be in the same place economically after a redemption or sale of a partner's interest, the tax consequences can be dramatically different. IRC Section 736 governs the treatment of liquidating payments to retiring and deceased partners. Section 736(b) describes the treatment of gains on these payments other than those covered by Section 736(a). Section 736(a) explains the treatment of distributive shares of income and guaranteed payments to exiting partners.

Like sales of partnership interests, if the partnership's assets include hot assets (inventory and untaxed accounts receivable), a portion of the proceeds is treated as ordinary income. For redemptions, however, only "substantially appreciated" inventory is included. As with sales of partnership interests, redeemed partnership interests are eligible for installment sale treatment. Unlike other sales and aside from hot assets, a partner can recover his basis first before recognizing gain on the redemption of his interest.

The BBA centralized partnership audit rules and the OBBBA's changes to the SALT cap have further complicated these tax considerations for tax professionals.

Listen as our panel of partnership experts explains the tax consequences of redeeming a partner's interest in an LLC or partnership.

Presented By

Joe C. Mandarino
Partner
Smith Gambrell Russell

Mr. Mandarino's practice focuses on corporate, tax and finance law. He is involved with a wide variety of businesses and transactions, including experience with compliance, planning and M&A activities for partnerships, individuals and corporations. Mr. Mandarino’s practice also includes representation in tax controversy work. He writes and speaks extensively on a wide range of business, tax and finance topics.

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Nathan Sosa
Senior Advisor
Hall CPA, PLLC

Mr. Sosa is a Senior Tax Advisor at Hall CPA PLLC.  

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Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Date + Time

  • event

    Friday, October 31, 2025

  • schedule

    1:00 p.m. ET./10:00 a.m. PT

I. Redeeming partnership interests

II. IRC Sections 736(b) and 736(a)

III. Goodwill

IV. Section 754 elections

V. Impact of recent legislation

A. Partnership audit rules

B. OBBBA and state PTE taxation regimes

C. Other

VI. Installment sales

VII. Section 751 property

VIII. Notable cases and rulings

The panel will cover these and other critical issues:

  • Tax consequences of redemptions on the exiting partner and the partnership
  • Calculating the tax on the redemption when the partnership holds hot assets
  • Structuring redemptions to withstand IRS challenges
  • Making a Section 754 election when a partner's interest is redeemed
  • The effect of SALT caps and the OBBBA on redemptions

Learning Objectives

After completing this course, you will be able to:

  • Identify redemptions qualifying for installment sale treatment
  • Determine when a partnership may benefit from a Section 754 election
  • Decide how state PTE regimes and the OBBBA impact redemptions
  • Ascertain when a redemption is subject to Section 736(a) versus 736(b)
  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite:

    Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.


BARBRI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

BARBRI CE webinars-powered by Strafford-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .