He should have been tracking his basis in the partnership (essentially his capital) personally, so when he reports the Schedule K-1 and the buyout, the appropriate amount of return of capital gets reported.
No, you do not need to complete either Form 8594 or Form 4797 unless part of the buyout was business assets other than cash.
And finally, you will use Box 20 Code AB for the value of outstanding receivables and inventory in the buyout and Code AD for the value of the depreciable property in the buyout.
See Box 20 Code AB, AC, AD for more specific information.
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