Where Do I Send Partnership Taxes?
Sale of partnership interest must be reported to the IRS with Form 8308 – Report of the Sale of Exchange of Certain Partnership Interests. Retiring partner capital interest is the first subtracted from the proceeds to calculate taxable income. A tax basis greater than the proceeds, can be deducted as a loss on investment.
How are guaranteed payments treated on a partnership tax return?
For other tax purposes, guaranteed payments are treated as a partner’s distributive share of ordinary income. Guaranteed payments are not subject to income tax withholding. The partnership generally deducts guaranteed payments on Form 1065, line 10, as a business expense. They are also listed on Schedules K and K-1 of the partnership return.
