As the year is ending, we want to remind clients of an IRS reporting requirement for partnerships to address tax avoidance strategies involving the transfer of partnership interests.  This reporting requirement is due January 31, 2025. 

Reporting Requirements 

• Form 8308: Form 8308, which reports sales or exchanges of partnership interests involving unrealized receivables or inventory items (“hot assets”), has been updated. The revised form requires more detailed information about the transferor and transferee, including their roles as record holders or beneficial owners, and specifics about the transferred partnership interest.  The IRS recently changed the due date to 1/31 each year. 

Action Steps 

If your partnership had any partners who sold, gifted, or transferred their partnership interest during 2024, please provide your YHB team member with the following information: 

• The name of the partner who transferred their ownership interest. 

• The date of the transfer. 

• Any partnership interest transfer agreements or contracts. 

• The method of transfer (e.g., sale, exchange, gift). 

This information is necessary to meet the new IRS filing requirement, with a due date of January 31, 2025.