For purposes of the private transfer exception, the redemption or repurchase agreement must be exercisable only upon death, disability or mental incompetence of the partner; or upon the retirement or termination of services of a partnership manager or full time employee.
In addition,
- Either:
- The redemption or repurchase agreement must require at least a 60 day delay after notification by a partner before the redemption or repurchase price is established, or
- The price must be established no more than four times a year; and
- No more than 10 percent of total interests in capital and profits are transferred in this manner during the tax year.
Treas. Reg. §1.7704-1(e)-(f)