Business & farm

This can be an extremely complicated area and depending on what type of property the partnership holds, it may be in your best interest to consult with a tax professional.

The response by @Carl is not correct based on the facts presented.

Comments as follows:

• Based on your facts, your consequences are governed by Revenue Ruling 99-6 Situation 1.  Attached is a link to this ruling. https://www.irs.gov/pub/irs-drop/rr-99-6.pdf
• The response may be different if you were a "retiring partner" and were being paid out over time by the partnership itself instead of the second partner.
• Keep in mind that since the LLC is being treated as a partnership I refer to "partner".  I realize that the LLC has members, but these terms are interchangeable since the LLC is being treated as a partnership.
• To sum it up, if your partner individually purchased your interest, then your LLC terminated at 12/31/2019.  Based on this, the 2019 Form 1065 should reflect a final return.
• As you can see from reading the revenue ruling, there are a number of issues that need to be addressed for both the remaining "partner" who now holds a single member LLC (SMLLC) and also for you.
• Depending on the assets held by the former multi-member LLC, some of your gain may be recharacterized as ordinary income should there be any "hot assets" in the LLC.  Your facts indicated that you will be filing form 8308.  This is only required if there are "hot assets", so your filing this form indicates this may impact you.  
• Have you maintained your basis in the LLC in order to determine your overall gain or loss on the transaction
• Since based on the facts, the 2019 Form 1065 is a final return, your gain or loss on this transaction needs to be reported on your 2019 Form 1040.
• I will not go into the myriad of issues that need to be addressed by the remaining "partner" who now has a SMLLC.

So as you can see, this is not an area for the feint of heart and I once again encourage BOTH of you to consult with a tax professional who can work through the issue for both of you so you can file accurate tax returns.