734b Adjustment - Amortization

Technical topics regarding tax preparation.
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Hello.

LLC taxed as partnership has two members, General Partner A and Limited Partner B. Operating Agreement allows for payments of Goodwill and redemption agreement calls for payments to be recorded under 736b. Partner B's interest is being completed liquidated and redeemed for $ 350,000 with payments being made when future contracts are paid. Partner B has zero basis in his interest, so all of the $ 350,000 is taxable to Partner B as capital gain as it's self-created Goodwill.

Under Rev. Rul. 93-13, I understand the 734(b) adjustment under 754 (partnership will make the election this year), corresponds in timing and amount to the recognition of gain or loss by the retiring partner with respect to those payments.

Assume the partnership makes $ 20,000 of redemption payments throughout Year 1. The partnership will make a 734b basis adjustment of $ 20,000 allocated to a 197 amortizable asset because that is the only amount that is being reported as gain by Partner B in Year 1. In Year 2, partnership makes $ 50,000 of payments and will make another 734b adjustment for $ 50,000.

Questions: In Year 1, does partnership start to amortize the $ 20,000 amount over 15 years? In Year 2, does partnership amortize the additional $ 50,000 under a new 15 year amortization schedule?

Thanks.
 

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