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A Little Clarity for Non-U.S. Persons Selling Partnership Interests

By: Williams Parker Harrison Dietz & Getzen.

The Tax Cuts and Jobs Act provided clarity to a question of how to treat gain or loss from the sale or exchange of a partnership interest held by a foreign person. The IRS, through Revenue Ruling 91-32, previously provided that “the gain realized by a foreign partner upon disposing of its interest in a U.S. partnership should be analyzed asset by asset and, to the extent any such asset would give rise to effectively connected income, the departing partner’s pro rata share of such gain should be treated as effectively connected income.” Read more.