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Partial Interest Disposition Calculator
Partial sales discount for lack of control and marketability.
Net sale value
$3,400,000
Pro rata (pre-discount)
$5,000,000
Total discount applied
0.3%
How the math works
Pro rata = asset × interest %. Combined discount = 1 − (1 − LoC)(1 − LoM). Net = pro rata × (1 − combined).
$5M pro rata. Combined 32% discount. Net $3.4M — significant markdown vs pro rata reflecting illiquidity and control.
How to Use
- Enter underlying asset value.
- Enter interest %.
- Enter lack of control discount %.
- Enter lack of marketability discount %.
- Enter tax basis in interest.
- Read net sale value.
Frequently Asked Questions
Why discounts?
Minority stakes (< 50%) can't force decisions — lack of control discount 10-25%. Private/illiquid interests can't sell on exchange — lack of marketability discount 15-35%. Combined: 30-50% discount vs pro-rata share of underlying value. IRS accepts for estate/gift; litigated for income tax.
Sale venues?
General partner/sponsor preemptive buy. Other LPs via right of first refusal. Secondary market (institutional LP buyers). Private equity secondary funds. Family/estate planning transactions. Each market different pricing and timing.
Tax treatment?
Long-term capital gain treatment if held > 1 year. Basis proportionate to interest sold. Sec 754 election lets partnership adjust inside basis. Complex for partnerships with depreciation recapture; simpler for single-asset LLCs.
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