Regardless of the reason for their termination, partnerships nearing the end of their existence create numerous tax issues for both the entity and for the partners.  Most of these issues pass through to the partners on their Schedules K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc.  Sometimes, federal tax law is guided by partnership agreements or state law.  An installment sale is a sale of property in which the taxpayer receives at least one payment after the year of sale. The year of sale is the one in which the taxpayer and another person enter into a binding agreement to transfer the property.  To be legally binding, the agreement must include adequate consideration and may be governed by state laws.