Income Averaging for Sale of Farm Partnership Interest?

Abstract

<p>There’s no question about the eligibility of income distributed from a farm partnership<strong>1 </strong>for income averaging.<strong>2 </strong>The question, however, is whether the sale of a partnership interest<strong> </strong>is also eligible for the statutory income averaging provision. The answer is not clear from<strong> </strong>the regulations nor is it completely clear whether a partner not engaged in farming could<strong> </strong>make use of the income averaging provision even if the proceeds from the sale of partnership<strong> </strong>interests would otherwise be eligible.<strong></strong></p>