La. R.S. 47:216 — Payments to a retiring partner or a deceased partner's successor in interest

A. Payments considered as distributive share or guaranteed payment. Payments made in liquidation of the interest of a retiring partner or a deceased partner shall, except as provided in Subsection B of this Section, be considered:
(1) as a distributive share to the recipient of partnership income if the amount thereof is determined with regard to the income of the partnership, or
(2) as a guaranteed payment described in R.S. 47:207 C if the amount thereof is determined without regard to the income of the partnership.
B. Payments for interest in partnership.
(1) General rule. Payments made in liquidation of the interest of a retiring partner or a deceased partner shall, to the extent such payments (other than payments described in Subsection B(2) of this Section) are determined, under the regulations prescribed by the collector, to be made in exchange for the interest of such partner in partnership property, be considered as a distribution by the partnership and not as a distributive share or guaranteed payment under Subsection A of this Section.
(2) Special rules. For purposes of this Subsection, payments in exchange for an interest in partnership property shall not include amounts paid for good will of the partnership, except to the extent that the partnership agreement provides for a payment with respect to good will.