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How do I divest shares of inherited California real estate limited partnerships which have tax liabilities but little value?

Redondo Beach, CA |

I inherited LP shares two years ago when I signed a form accepting ownership from the trustee. I was not informed of their lack of value or their built-in tax liabilities. I requested to withdraw from these partnerships, and the general partner stated nobody has ever withdrawn from any of his partnerships, and hinted at adverse consequences of doing so. I tried giving away these shares to charities, but they were refused. The K-1's are costing me taxes every year and my CPA says it will get worse. How do I get rid of these shares and their tax liabilities?

Attorney Answers 3


  1. I'd sit down with a TAX LAW attorney and discuss your options. Good Luck!


  2. I agree with Mr. Potter. You need to have the partnership documents reviewed by a tax or business attorney to discuss your options. It is really impossible to give you specific advise on how to do it in this situation without reviewing the partnership documents.


  3. I agree with the previous attorneys; a review of the partnership documents and the actual tax issues is necessary to providing advice in this forum.

    THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mrs. Cook is licensed to practice law throughout the state of California with offices in San Diego County. She is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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