Question

Your client owns a parcel of land that has depreciated in value. He wants to know if there is a way he can contribute the property to his partnership, have the partnership sell the property, and convert the existing capital loss into an ordinary loss. He also wants to know if part of the loss would be allocated to his other partners. What is your reaction?

Answer 1

You can contribute the property to partnership but it will not be treated as an ordinary loss unless the partnership is in the real estate sector. So if partnership is not in real estate sector it will be capital loss of the partnership not the ordinary loss.

And also the loss will be allocated to other partners.

Hope this makes contribution to your success. Hit Like to motivates the experts to provide quality solutions.

Any feedback will also be appreciated.

Best of luck?!