Distribution of property in a partnership firm

Rahul Jain (Accountant) (316 Points)

29 December 2013  

A Partnership firm is engaged in Construction of a residential and commercial units.The 2 partners of the firm wants distribution of unsold flats and commercial shops between themselves.

 
So should the partners transfer the properties in their individual names or keep it in Firm's name and take money as and when it is sold. 
 
What will be the effect in firm's books and individual partner's books of account? 
 
What will be the Tax Liability?