On September 1 20X0 Q retired from the QRS Partnership whose

On September 1, 20X0, Q retired from the QRS Partnership whose year ended on November 30. Q continued to receive retirements until August 31, 20X1, when his entire partnership interest was liquidated. For tax purposes, when did Q cease to be regarded as a partner? (A) August 31, 20X1 (B) December 31, 20X1, (C) November 30, 20X1, (D) September 1, 20X0.

Solution

Ans is A August 31, 20X1

Explanation: Normally a partner retires when he ceases to be a partner under local law still for the purpose of subchapter K chapter 1 of the code he will be treated as partner until his entire interest in partnership is liquidted.(US 1.736-1)