26 U.S.C. § 736: Payments to a retiring partner or a deceased partner’s successor in interest

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 as a guaranteed payment described in section 707(c) if the amount thereof is determined without regard to the income of the partnership. 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 paragraph (2)) are determined, under regulations prescribed by the Secretary, 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). unrealized receivables of the partnership (as defined in section 751(c)), or good will of the partnership, except to the extent that the partnership agreement provides for a payment with respect to good will. capital is not a material income-producing factor for the partnership, and the retiring or deceased partner was a general partner in the partnership. The amendments made by this section [amending this section and section 751 of this title ] shall apply in the case of partners retiring or dying on or after January 5, 1993 . The amendments made by this section shall not apply to any partner retiring on or after January 5, 1993 , if a written contract to purchase such partner’s interest in the partnership was binding on January 4, 1993 , and at all times thereafter before such purchase.”