Sale of a business question

[wacnstac]

I have a rather complicated (to me anyway) question about the sale of a business which I was a LLC partner in.

I started the business in the early 2000's.   Around 2009 I sold 51% of the business to a partner.  The original entailed the creation of a completely new LLC with the old LLC being dissolved.  The partner paid me cash for the 51% of the old business and I contributed my remaining 49% to the new LLC (value pegged at the valuation of the business in 2009).  This contribution was noted and tracked in my capital account in the new LLC.

I paid taxes on the money I received in 2009 for the 51% as a long term capital gain (I had held the LLC since around year 2000.  

Fast forward to early 2018.  Another company bought 100% of the LLC that was created in 2009.  I was paid in cash again for my remaining 49% which had risen in value since the deal in 2009.  When I did my taxes, I paid capital gains on what I received in cash in 2018 minus the value in my LLC capital account (which I looked at as my cost basis in the new LLC).  

Does this all sound correct?

[LudwigVan_fan]

That is basically correct.  However, the gain may not be all capital gain.  There may be some ordinary income.  You need to review what was sold and determine if any of it falls into the categories of unrealized receivables and inventory.  Page 11 of Pub 541

Also, value of the capital account may or may not be the same as the adjusted basis in your partnership interest.  You need to calculate the basis of your interest.  Again, that should be in Pub 541

https://taxmap.irs.gov/taxmap/pubs/p541-007.htm

https://www.irs.gov/pub/irs-pdf/p541.pdf