Distribution of property by a partnership firm

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Rahul Jain (Querist)
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29 December 2013 A Partnership firm is engaged in Construction of a residential and commercial units.The 2 partners of the firm wants distribution of unsold flats and commercial shops between themselves.So should the partners transfer the properties in their individual names or keep it in Firm's name and take money as and when it is sold.

What will be the effect in firm's books and individual partner's books of account?

What will be the Tax Liability?

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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29 December 2013 Better would be to sell both the properties and then distribute the money.
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This way you can easily avoid legal complexities.
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I assume that due to "good market price" both the partners want to sell the properties.

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