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What is the tax impact of a real estate partnership in which the partners have refinanced and are about to redistribute the money?

April 26, 2017impact money partners partnership Real Estate redistribute refinanced tax

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What is the tax impact of a real estate partnership in which the partners have refinanced and are about to redistribute the money?

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There is generally no tax due on debt-financed distributions. The liabilities associated with the refinancing give the partners additional basis to distribute. The partnership is subject to interest-tracing rules on these debt-financed distributions.