Abstract It is clear from the statutes that most distributions in liquidation of a partnership interest that involve some cash payments are subject to the provisions of three Code sections: Sections 731, 736, and 751. It is critical to understand in what sequence the provisions of all three sections are applicable. To facilitate the proper use of the intricate rules, the authors have developed a worksheet approach that is designed to apply the appropriate provisions in their correct sequence. Initially, this approach may require a considerable start-up effort. However, once the concepts have been mastered, the worksheet becomes an indispensable tool that converts a difficult and tedious task to a programmed decision process which simplifies the task, eliminates errors, and may be adaptable to the computer.
Streuling et al. (Sun,) studied this question.