Interests not traded on an established securities market are “readily tradable on a secondary market or substantial equivalent thereof” if the partners are readily able to buy, sell, or exchange their partnership interests in a manner that is economically comparable to trading on an established securities market. This will be true if:
- Interests are regularly quoted by any person making a market in those interests;
- Any person regularly makes bid or offer quotes for the interests available to the public, and stands ready to effect buy or sell transactions at the quoted prices;
- The holder of the interest has a readily available, regular, and ongoing opportunity to sell or exchange the interest through a public means of obtaining or providing information of offers to buy, sell, or exchange interests in the partnership; or
- Prospective buyers and sellers have another opportunity to buy, sell, or exchange interests in the partnership whose regularity and continuity is comparable to those described above.
Treas. Reg. §1.7704-1(c)