>>If a partner has invested over some time $10K and the value
increased to -say- $17K, and he does a partial withdrawal in
cash for $15K, does he have any tax to declare?

Possibly. It depends on what his total investments PLUS distributed earnings are worth at the time of the partial withdrawal.

 

>>What would show on his K1?

 

The Schedule K-1 only shows his share of the club's earnings. It does not show whether he has a capital gain (or loss) to report due to his ownership of a partnership interest.

>>Is it true that by his partial withdrawal in cash, the other
partners have now an increase in their tax commitment when
they eventually do withdrawals?

Absolutely not.

>>A partial withdrawal in form of appreciated stocks would
bring about a "tax transfer". What is the tax basis for this
partner and is there a change in the tax for the other
partners?

There is no tax transfer. The only thing that can be affected is the timing of when tax is paid.

In a partial withdrawal, the member who receives the stock generally assumes the same cost basis in the stock as the club had, but it depends on his cost basis, the cash distributed, etc. The overall calculations can be complex. There is a good discussion about this here:

 

 

The net result is that the wrong choice could accelerate the withdrawing partners tax payment.

>>For this partial withdrawal, does the partnership allot the
most appreciated stock or would it be 'fairer' to tediously
select from various appreciated stocks a 50% gain equaling
the increase in -above- value from $10K to $15K?

Read the article first. In general, funding partial withdrawals with cash is the easiest choice. Afterwards, come back and ask again.

 

Ira Smilovitz
Ado