Rev. Rul. 55-68

A partnership is dissolved and its business is converted into a sole proprietorship where one of the partners purchases the partnership interests of all of the other partners. See Nathan Blum et al. v. Commissioner , 5 T.C. 702. Where a taxpayer purchases the partnership interests of all the other partners in a partnership of which he is a member he becomes the owner of the assets, by purchase as respects the fractional interest attributable to the purchased partnership interests, and, as respects the fraction attributable to his own partnership interest, by liquidation of his partnership interest through an in kind distribution which is an exchange within the meaning of section 117(h)(1) of the Internal Revenue Code of 1939. Accordingly, since in such case the bases of the distributed assets attributable to his partnership interest are determined with reference to section 113(a)(13) of the Code, the taxpayer shall compute the holding period for such property received in liquidation which is attributable to his partnership interest, from the time he acquired his partnership interest. With respect to the assets attributable to partnership interests which he acquired by purchase from the other partners, the holding period of such assets begins from the date on which such partnership interests were purchased. George H. Thornley et ux. v. Commissioner , 147 Fed.(2d) 416, and Adam Kessler Jr. v. United States , 124 Fed.(2d) 152