My wife was in a two-person business partnership. She died in September. As her heir, I was given her share of the partnership's remaining cash on hand. Is it taxable?

RHam · ‎June 4, 2019

The surviving partner told me this money had already been taxed in previous years and therefore would not be taxable now. Is this true?

IreneS · ‎June 4, 2019

I'm sorry for your loss.

No. According to the IRS Pub. 541 - Partnerships, the cash you received from the partnership is considered a distribution and is not taxable as long as the amount you received does not exceed your wife's adjusted basis in the partnership (which it probably doesn't).

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IreneS · ‎June 4, 2019

I'm sorry for your loss.

No. According to the IRS Pub. 541 - Partnerships, the cash you received from the partnership is considered a distribution and is not taxable as long as the amount you received does not exceed your wife's adjusted basis in the partnership (which it probably doesn't).

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RHam · ‎June 4, 2019

Thank you!

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My wife was in a two-person business partnership. She died in September. As her heir, I was given her share of the partnership's remaining cash on hand. Is it taxable?