Hey All:
My client sold her general partnership interest in a merger and received K-1 (Form 1065) for this sale. She mentioned that part of sale is an ‘earn-out’ based on reaching certain amount of revenue within 3 years. I assume that this “earn out” sale may be reported under the “installment” method” But, I don’t see any information or instructions on the k-1 that help me report the “installment” sale details on her individual tax return. The only thing I see is “P Section 453A( C) information with partners' outstanding installment obligations and partner’s share of deferred gain related to those obligations.
QUESTIONS:
- Does the Section 453A( C) information -specifically amounts of partner's outstanding installment obligations and deferred gain provide anything relevant for amounts to report as installment sale on the tax return ?
- Is there any special instructions, explanations, or codes on Schedule K-1 (Form 1065) with information for reporting sale on installment ? Or, do I need to rely on outside reports to interpret the k-1 ?
Thanks, D