I invested $10,000 in a partnership but due to a conflict of interest, I need to withdraw from the partnership. I get a Schedule K-1 yearly from this partnership.
If I sell my shares to my spouse for $1, what are the tax implications? The remaining capital in the partnership is around $5000. Since we file jointly, does the loss and gain cancel one another out?
You wouldn't really 'sell' your Partnership Interest to your spouse for $1, that is essentially a "gift".
As a side note, does your spouse owning it avoid the "conflict of interest"? Depending on what the "conflict of interest" is, transferring it to your spouse may not avoid it.
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