If I’m a 25% owner of a family limited partnership but no longer want to be involved in the business and portion back to my father, how do I do this?

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If I’m a 25% owner of a family limited partnership but no longer want to be involved in the business and portion back to my father, how do I do this?

We own a few hardware stores and fast food restaurants.

Asked on December 17, 2015 under Business Law, Arizona

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

The only way to divest yourself of your interest is to either sell or give it to someone else. If the operating, etc. agreement has some provision regarding selling, etc. your interest, you have to follow it; otherwise, you'll need to negotiate with someone (e.g. your father) to either purchase your interest or accept it as a gift. Since there may be different tax consequences for both you and the person (if any) who buys or receives your interest, you should speak to a tax preparer about the different options (e.g. if you sell; if you give/gift) and the effects thereof.


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