@Opus 17 wrote:
I would say that if the owner’s family buys out the lease from the managers, that is a capital transaction. The managers would realize a capital gain or capital loss.....
That involves a fact that we have no way of knowing based solely upon the original post.
If the lease was created by a provision in the will, then a buyout at a gain would be a short-term capital gain (since it came into existence on the date of the decedent's death). If the buyout resulted in a loss, then that loss would be an ordinary loss (if the lease is Section 1231 property).
Regardless, this is an extremely complex situation, so again, the parties involved need professional tax guidance and legal counsel.
