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In the past, this would have been reported on the partnership return with a K-1 distributed to each partner.

I was thinking of "the same" in a bigger picture sense. Meaning that each individual former partner would report the income the same way it would have passed through from the partnership. So the rental portion of the judgement would be reported as ordinary income, subject to the passive activity rules (if that makes a difference for the individual partner). The interest portion would be reported as interest income on schedule B (or directly on the 1040 if that schedule is not required).

I wouldn't file a partnership tax return unless there were some compelling reason to do so.

--Peter
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