Bradley T. Borden (Brooklyn; Google Scholar), Douglas L. Longhofer (Central Missouri) & Matthew Rappaport (UC-Berkeley), Tax Flotsam of Partnership Mergers and Divisions, 78 Tax Law. ___ (2024):

Partnership mergers and divisions occur regularly as the ownership of partnerships changes through various types of transactions. This article reviews the general rules governing partnerships mergers and divisions, and then it proceeds to examine numerous other tax issues that arise and should be accounted for as part of any merger or division transaction, including determining the holding periods of partnership assets and interests in partnerships, section 704(c), the anti-mixing bowl rules, possible application of the disguise-sale rules, recapture considerations, effects of changes in partners’ shares of partnership liabilities, accounting for section 751 hot assets, issues that arise if property is qualified-opportunity-zone property, matters related to the BBA audit rules, and potential gift and estate tax consequences. The article will make a significant desk reference for anyone advising entities taxed as partnerships or their members.

Conclusion
Business happens, transactions happen, tax partnerships combine, and tax partnerships split up. These things are inevitable. Such transactions also have tax consequences. The nature of the transactions are not inevitable. The evolution of tax law as it relates to partnership mergers and divisions has become form-driven. The form of the transaction can determine the tax consequences of the transaction. Business owners and their advisors, through careful planning, can choose a form that results in the most favorable outcomes for the partiers to the transaction. By controlling the transaction and considering the numerous tax rules that apply to such transactions, the parties can reduce the potential negative effects of the technical tax flotsam that inevitably follows partnership mergers and divisions.