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When does a partnership need an EIN?

A partnership is required to obtain an EIN. It needs a new EIN if it is incorporating, one partner takes over and operates as a sole proprietorship, or if the partnership is terminated and a new partnership begins. Yet, it does not need a new EIN if the partnership declares bankruptcy, the partnership name changes, it changes or adds locations, or if the partnership terminates under IRC Section 708 (b) (1) (B). However, if a liquidating trust is established for a partnership that is in bankruptcy, an EIN for that trust is required. 

For a partnership to be considered terminated, at least half of the total interest in partnership capital and profits must be sold or exchanged to another partner. If the remaining partners immediately contribute the properties to a new partnership, there is no need for a new EIN. 


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