Share with your friends

KPMG report: Sale of partnership interests resulting in ordinary income

KPMG report: Sale of partnership interests

Partners selling interests in partnerships with “hot assets”—including certain non-cancellable service contracts—may recognize ordinary income.


Related content

The IRS recently argued in a court case that gain from the sale of a management company was predominately ordinary income because the majority of the company’s value related to service contracts. 

Read a November 2019 report [PDF 128 KB]: What’s News in Tax: Customer Value May Result in Ordinary Income from the Sale of Partnership Interests

This report explains the potential significance of the IRS challenge and the importance of identifying customer value in connection with the sale of partnership interests. 

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal