Barbara:

Ira answered it in a nutshell.

If you want to review a more in-depth discussion of the
ramifications of transferring stock in a partial withdrawal,
read the article found in bivio's help area. It is under
"withdrawals" in the index.

https://www.bivio.com/trez_talk/mail-thread?p=69429100003

The explanation has been provided in multiple other message
traffic on this site as well. A search of prior messages
will find several explaining the impact on the partnership
and the transferee.

To respond to your comment: "To divide it all up at once
seems mindboggling."
You don't have to withdraw all partners at the same time. Do
one or two, or three or four together. Just make the
withdrawals full withdrawals. You are still a legal
partnership as long as you have two partners. People could
volunteer the order in which they exit; or you could do
partners with the smallest holdings first. I would aim to
make the withdrawals of the final two partners in December
so you can file the final Partnership tax returns in the
normal cycle in 2026.

Jack