Chapter 11 Partnerships: Distributions, Transfer of Interests, and Terminations Partnerships:...

Chapter 11Chapter 11

Partnerships: Distributions, Transfer of Interests,

and Terminations

Partnerships: Distributions, Transfer of Interests,

and Terminations

Copyright ©2008 South-Western/Thomson LearningCopyright ©2008 South-Western/Thomson LearningCopyright ©2008 South-Western/Thomson LearningCopyright ©2008 South-Western/Thomson Learning

Corporations, Partnerships,Corporations, Partnerships,Estates & TrustsEstates & Trusts

Corporations, Partnerships,Corporations, Partnerships,Estates & TrustsEstates & Trusts

C11 - 2Corporations, Partnerships, Estates & TrustsCorporations, Partnerships, Estates & Trusts

Distributions from a Partnership (slide 1 of 4)


• All distributions of cash and property fall into two categories:– Liquidating distributions– Nonliquidating distributions

• Depends on whether the partner remains a partner in the partnership after the distribution

• All distributions of cash and property fall into two categories:– Liquidating distributions– Nonliquidating distributions

• Depends on whether the partner remains a partner in the partnership after the distribution




• A liquidating distribution occurs when either:– Partnership itself liquidates and distributes all

its property to the partners, or– Ongoing partnership redeems interest of one of

its partners• e.g., Partner retires

• A liquidating distribution occurs when either:– Partnership itself liquidates and distributes all

its property to the partners, or– Ongoing partnership redeems interest of one of

its partners• e.g., Partner retires




• A nonliquidating distribution is any distribution from a continuing partnership to a continuing partner– Two types of nonliquidating distributions

• Draw– Distribution of partner’s share of current or accumulated

profits

• Partially liquidating distribution– Reduces partner’s interest in partnership capital but does

not liquidate partner’s interest

• A nonliquidating distribution is any distribution from a continuing partnership to a continuing partner– Two types of nonliquidating distributions

• Draw– Distribution of partner’s share of current or accumulated

profits

• Partially liquidating distribution– Reduces partner’s interest in partnership capital but does

not liquidate partner’s interest




• Distributions from a partnership may be either:– Proportionate—Partner receives his or her share

of certain ordinary income-producing assets– Disproportionate—Partner’s share of certain

ordinary income-producing assets increases or decreases

• Distributions from a partnership may be either:– Proportionate—Partner receives his or her share

of certain ordinary income-producing assets– Disproportionate—Partner’s share of certain

ordinary income-producing assets increases or decreases


Proportionate Nonliquidating Distributions (slide 1 of 3)


• Neither partner nor partnership recognizes gain or loss on proportionate nonliquidating distributions– Partner usually takes a carryover basis in assets

distributed– Basis in partnership interest is reduced by

amount of cash and basis of property distributed

• Neither partner nor partnership recognizes gain or loss on proportionate nonliquidating distributions– Partner usually takes a carryover basis in assets

distributed– Basis in partnership interest is reduced by

amount of cash and basis of property distributed




– Partner recognizes gain to extent cash received exceeds partner’s adjusted basis (outside basis) in partnership interest

– Partner cannot recognize loss in a nonliquidating distribution

– Partner recognizes gain to extent cash received exceeds partner’s adjusted basis (outside basis) in partnership interest

– Partner cannot recognize loss in a nonliquidating distribution




• Property distributions– No gain recognized on a property distribution

• If inside basis of property distributed exceeds partner’s outside basis in partnership interest, distributed asset takes substituted basis

• Assets are deemed distributed and basis applied in a certain order

• Property distributions– No gain recognized on a property distribution

• If inside basis of property distributed exceeds partner’s outside basis in partnership interest, distributed asset takes substituted basis

• Assets are deemed distributed and basis applied in a certain order


Ordering RulesOrdering Rules

1. Cash

2. Unrealized receivables and inventory

3. All other assets

• Basis is allocated to assets within a category based on adjusted basis to partnership

1. Cash

2. Unrealized receivables and inventory

3. All other assets

• Basis is allocated to assets within a category based on adjusted basis to partnership


Proportionate Nonliquidating Distribution Examples (slide 1 of 6)


Bill’s basis in partnership interest: $30,000 Proportionate nonliquidating distributions (independent fact situations): Assets Distributed A B C .Cash $15,000 $15,000 $ 5,000Land—basis N/A $ 6,000 N/A

(Fair mkt value) N/A $10,000 N/A Accts rec—basis N/A N/A -0- (Fair mkt value) N/A N/A $16,000

Bill’s basis in partnership interest: $30,000 Proportionate nonliquidating distributions (independent fact situations): Assets Distributed A B C .Cash $15,000 $15,000 $ 5,000Land—basis N/A $ 6,000 N/A

(Fair mkt value) N/A $10,000 N/A Accts rec—basis N/A N/A -0- (Fair mkt value) N/A N/A $16,000




A B C .

Basis in interest $30,000 $30,000 $30,000

Cash distributed ( 15,000) (15,000) (5,000)

Basis after cash 15,000 15,000 25,000

Acct. rec. distrib. N/A N/A (-0-)

Basis after A.R. 15,000 15,000 25,000

Land Distrib. N/A ( 6,000) N/A

Basis after all dist. $15,000 $ 9,000 $25,000

A B C .


Cash distributed ( 15,000) (15,000) (5,000)

Basis after cash 15,000 15,000 25,000

Acct. rec. distrib. N/A N/A (-0-)

Basis after A.R. 15,000 15,000 25,000

Land Distrib. N/A ( 6,000) N/A

Basis after all dist. $15,000 $ 9,000 $25,000




A B C .

Basis in p’ship int. $15,000 $9,000 $25,000Basis in cash 15,000 15,000 5,000Basis in land N/A 6,000 N/ABasis in A/R N/A N/A -0-Total basis $30,000 $30,000 $30,000

Sale of non-cash assetsat FMV: Selling price N/A $10,000 $16,000Basis N/A (6,000) (-0-)Gain N/A $4,000 $16,000

A B C .

Basis in p’ship int. $15,000 $9,000 $25,000Basis in cash 15,000 15,000 5,000Basis in land N/A 6,000 N/ABasis in A/R N/A N/A -0-Total basis $30,000 $30,000 $30,000

Sale of non-cash assetsat FMV: Selling price N/A $10,000 $16,000Basis N/A (6,000) (-0-)Gain N/A $4,000 $16,000




Bill’s basis in partnership interest: $30,000 Proportionate nonliquidating distributions (independent fact situations): Assets Distributed D E F .Cash $40,000 N/A $20,000Relief of liabilities N/A 40,000 N/ALand-basis N/A N/A $30,000(Fair mkt value) N/A N/A $50,000

Bill’s basis in partnership interest: $30,000 Proportionate nonliquidating distributions (independent fact situations): Assets Distributed D E F .Cash $40,000 N/A $20,000Relief of liabilities N/A 40,000 N/ALand-basis N/A N/A $30,000(Fair mkt value) N/A N/A $50,000




D E F .


Cash distributed (40,000) N/A (20,000)

Relief of liabilities N/A (40,000) N/A

Gain recognized 10,000 10,000 N/A .

Basis after cash (and

deemed cash) dist. -0- -0- 10,000

Land distrib. N/A N/A (10,000)

Basis after all distrib. -0- -0- -0-

D E F .


Cash distributed (40,000) N/A (20,000)

Relief of liabilities N/A (40,000) N/A

Gain recognized 10,000 10,000 N/A .

Basis after cash (and

deemed cash) dist. -0- -0- 10,000

Land distrib. N/A N/A (10,000)

Basis after all distrib. -0- -0- -0-




D E F .Basis in p'ship int. -0- -0- -0-Basis in cash 40,000 N/A 20,000Liabilities relieved N/A 40,000 N/ABasis in land N/A N/A 10,000Gain recognized (10,000) (10,000) N/A .Original basis 30,000 30,000 30,000

Sale of non-cash assetsat FMV: Selling price N/A N/A $50,000Basis N/A N/A (10,000)Gain N/A N/A $40,000

D E F .Basis in p'ship int. -0- -0- -0-Basis in cash 40,000 N/A 20,000Liabilities relieved N/A 40,000 N/ABasis in land N/A N/A 10,000Gain recognized (10,000) (10,000) N/A .Original basis 30,000 30,000 30,000

Sale of non-cash assetsat FMV: Selling price N/A N/A $50,000Basis N/A N/A (10,000)Gain N/A N/A $40,000


Effect of Liquidating DistributionEffect of Liquidating Distribution

• In general:– No gain or loss is recognized by partnership– Partner reduces basis in partnership interest by

basis in property received at each level using Ordering Rules

– Partner’s entire basis in interest will be absorbed by distributed assets

• In general:– No gain or loss is recognized by partnership– Partner reduces basis in partnership interest by

basis in property received at each level using Ordering Rules

– Partner’s entire basis in interest will be absorbed by distributed assets


Exceptions to Liquidating Distribution Rules (slide 1 of 2) Exceptions to Liquidating Distribution Rules (slide 1 of 2)

• Gain is recognized if:– Cash distributed exceeds partner’s basis– Precontribution gain exceptions– Disproportionate distribution

• Gain is recognized if:– Cash distributed exceeds partner’s basis– Precontribution gain exceptions– Disproportionate distribution


Exceptions to Liquidating Distribution Rules (slide 2 of 2) Exceptions to Liquidating Distribution Rules (slide 2 of 2)

• Loss is recognized only if:– Assets received include ONLY cash, unrealized

receivables and inventory, and– Outside basis exceeds partnership’s inside basis

in distributed property

• Loss is recognized only if:– Assets received include ONLY cash, unrealized

receivables and inventory, and– Outside basis exceeds partnership’s inside basis

in distributed property


Proportionate Liquidating Distribution Examples (slide 1 of 4)


Bill’s basis in partnership interest: $30,000

Proportionate liquidating distributions (partnership also liquidates) (independent fact situations):

G H I .

Cash $50,000 $10,000 $10,000

Unrealized rec. N/A -0- -0-

(Fair mkt value) N/A $16,000 $16,000

Filing cabinet (1231) N/A N/A 300

(Fair mkt value) N/A N/A 300

Bill’s basis in partnership interest: $30,000

Proportionate liquidating distributions (partnership also liquidates) (independent fact situations):

G H I .

Cash $50,000 $10,000 $10,000

Unrealized rec. N/A -0- -0-

(Fair mkt value) N/A $16,000 $16,000

Filing cabinet (1231) N/A N/A 300

(Fair mkt value) N/A N/A 300




G H I .

Basis in interest $30,000 $30,000 $30,000Cash distribution (50,000) (10,000) (10,000)

Gain recognized 20,000 N/A N/ABasis after cash -0- 20,000 20,000A/R distrib. N/A -0- -0-

Loss recognized N/A(20,000) N/ABasis after A/R -0- -0- 20,000Filing cabinet N/A N/A (20,000)Ending basis $ -0- $ -0- $ -0-

G H I .

Basis in interest $30,000 $30,000 $30,000Cash distribution (50,000) (10,000) (10,000)

Gain recognized 20,000 N/A N/ABasis after cash -0- 20,000 20,000A/R distrib. N/A -0- -0-

Loss recognized N/A(20,000) N/ABasis after A/R -0- -0- 20,000Filing cabinet N/A N/A (20,000)Ending basis $ -0- $ -0- $ -0-




G H I .

Basis in p’ship int. $ -0- $ -0- $ -0-

Basis in cash 50,000 10,000 10,000

Basis in A/R N/A -0- -0-

Basis in filing cabinet N/A N/A 20,000

Capital (Gain)/loss (20,000) 20,000 N/A .

Original basis $30,000 $30,000 $30,000

G H I .

Basis in p’ship int. $ -0- $ -0- $ -0-

Basis in cash 50,000 10,000 10,000

Basis in A/R N/A -0- -0-

Basis in filing cabinet N/A N/A 20,000

Capital (Gain)/loss (20,000) 20,000 N/A .

Original basis $30,000 $30,000 $30,000




Sale of non-cash assets at FMV:Example H: A/R Fil.Cab. Total

. Selling price $16,000 N/A $16,000 Basis -0- N/A -0- . Gain/(loss) $16,000 N/A $16,000

(Ordinary)Example I: Selling price $16,000 $ 300 $16,300 Basis -0- 20,000 20,000 Gain/(loss) $16,000 ($19,700) ($3,700)

(Ordinary) (May be ord)

Sale of non-cash assets at FMV:Example H: A/R Fil.Cab. Total

. Selling price $16,000 N/A $16,000 Basis -0- N/A -0- . Gain/(loss) $16,000 N/A $16,000

(Ordinary)Example I: Selling price $16,000 $ 300 $16,300 Basis -0- 20,000 20,000 Gain/(loss) $16,000 ($19,700) ($3,700)

(Ordinary) (May be ord)


Property Distributions with Special Tax Treatment (slide 1 of 4)


• Disguised sales– Contribution of appreciated property to

partnership followed by a cash distribution to the contributing party may be treated as a disguised sale

– Treated as a sale of property resulting in gain recognition

• Partnership’s basis in the asset is cost

• Disguised sales– Contribution of appreciated property to

partnership followed by a cash distribution to the contributing party may be treated as a disguised sale

– Treated as a sale of property resulting in gain recognition

• Partnership’s basis in the asset is cost




• Marketable securities– FMV of marketable securities distributed to a

partner is treated as a cash distribution• Some or all of excess of FMV of securities

distributed over partner’s outside basis is taxable gain

– Marketable securities include most actively traded debt or equity interests, options, futures, and derivatives

– Exceptions apply

• Marketable securities– FMV of marketable securities distributed to a

partner is treated as a cash distribution• Some or all of excess of FMV of securities

distributed over partner’s outside basis is taxable gain

– Marketable securities include most actively traded debt or equity interests, options, futures, and derivatives

– Exceptions apply




• Precontribution gain property– Contributing partner recognizes gain on

distribution of precontribution gain property in two situations:

1. If property is distributed to another partner within 7 years of contribution date, contributing partner recognizes remaining precontribution gain

Partner’s basis in partnership and basis of distributed property is increased by gain recognized

• Precontribution gain property– Contributing partner recognizes gain on

distribution of precontribution gain property in two situations:

1. If property is distributed to another partner within 7 years of contribution date, contributing partner recognizes remaining precontribution gain

Partner’s basis in partnership and basis of distributed property is increased by gain recognized




• Precontribution gain property– Contributing partner recognizes gain on distribution of

precontribution gain property in two situations (cont’d):2. If partnership distributes ANY property other than cash to a

partner within 7 years after THAT partner contributes appreciated property, the partner recognizes the lesser of:

– Remaining net precontribution gain

– Excess of FMV of distributed property over partner’s basis in partnership interest

• Precontribution gain property– Contributing partner recognizes gain on distribution of

precontribution gain property in two situations (cont’d):2. If partnership distributes ANY property other than cash to a

partner within 7 years after THAT partner contributes appreciated property, the partner recognizes the lesser of:

– Remaining net precontribution gain

– Excess of FMV of distributed property over partner’s basis in partnership interest


Disproportionate Distributions(slide 1 of 3)

Disproportionate Distributions(slide 1 of 3)

• Occurs when partnership distributes cash or property to a partner which increases or decreases the partner’s share of ordinary income-producing assets (hot assets)

• Occurs when partnership distributes cash or property to a partner which increases or decreases the partner’s share of ordinary income-producing assets (hot assets)


Disproportionate Distributions (slide 2 of 3)


• If partner receives less than proportionate share of hot assets, then treated as if:– Partnership distributed some of the assets, and – Partner sold these hot assets back to partnership– Partner recognizes ordinary income on sale of

the hot assets; Partnership’s basis in hot assets is cost

• If partner receives less than proportionate share of hot assets, then treated as if:– Partnership distributed some of the assets, and – Partner sold these hot assets back to partnership– Partner recognizes ordinary income on sale of

the hot assets; Partnership’s basis in hot assets is cost




• Hot assets include:– Substantially appreciated inventory

• Inventory includes all assets other than cash, capital and §1231 assets

• Substantially appreciated means FMV > 120% of partnership’s adjusted basis in inventory

– Unrealized receivables• Rights to receive future amounts that will result in

ordinary income recognition

• Hot assets include:– Substantially appreciated inventory

• Inventory includes all assets other than cash, capital and §1231 assets

• Substantially appreciated means FMV > 120% of partnership’s adjusted basis in inventory

– Unrealized receivables• Rights to receive future amounts that will result in

ordinary income recognition


§736: Liquidating Distribution Where P’ship Does Not Liquidate (slide 1 of 3)


• §736(a) income payment:– Treated as distributive share of partnership income or

guaranteed payment to partner– Certain items if partnership is service-provider and

retiring partner is a general partner:• Unrealized receivables (except depreciation recapture)• Goodwill (unless provided for in partnership agreement)

• §736(b) property payment:– Payments made for liquidated partner’s share of

partnership’s assets

• §736(a) income payment:– Treated as distributive share of partnership income or

guaranteed payment to partner– Certain items if partnership is service-provider and

retiring partner is a general partner:• Unrealized receivables (except depreciation recapture)• Goodwill (unless provided for in partnership agreement)

• §736(b) property payment:– Payments made for liquidated partner’s share of

partnership’s assets




• §736(a) income payment:– Partner has:

• Ordinary income (guaranteed payment), or

• Distributive share of income

– Partnership has:• Guaranteed payment (deductible) if determined

without regard to partnership profits

• Distributive share if based on profits

• §736(a) income payment:– Partner has:

• Ordinary income (guaranteed payment), or

• Distributive share of income

– Partnership has:• Guaranteed payment (deductible) if determined

without regard to partnership profits

• Distributive share if based on profits




• §736(b) property payment:– Disproportionate distribution to extent of

partner’s share of hot assets– Return of basis (and capital gain (loss) for

remainder)

• §736(b) property payment:– Disproportionate distribution to extent of

partner’s share of hot assets– Return of basis (and capital gain (loss) for

remainder)


Sale of Partnership Interest (slide 1 of 4)


• Generally, results in gain or loss recognition by selling partner– Gain(loss) = amount realized less partner’s

basis in partnership interest– Partnership liabilities assumed by purchasing

partner are treated as part of consideration paid for the partnership interest

• Generally, results in gain or loss recognition by selling partner– Gain(loss) = amount realized less partner’s

basis in partnership interest– Partnership liabilities assumed by purchasing

partner are treated as part of consideration paid for the partnership interest




• Partnership tax year closes for selling partner on sale date– Partner’s share of income through sale date is

calculated• Can prorate annual income or use interim closing of

the books

– Taxed to selling partner and increases basis in partnership interest

• Partnership tax year closes for selling partner on sale date– Partner’s share of income through sale date is

calculated• Can prorate annual income or use interim closing of

the books

– Taxed to selling partner and increases basis in partnership interest




• Effect of hot assets– Hot assets include:

• Unrealized receivables (same as for disproportionate distributions)

• Inventory– Includes all partnership property except money, capital

assets, and §1231 assets

• Effect of hot assets– Hot assets include:

• Unrealized receivables (same as for disproportionate distributions)

• Inventory– Includes all partnership property except money, capital

assets, and §1231 assets




• Effect of hot assets (cont’d)– Must allocate sales price of partnership interest

between “hot” (ordinary income) assets and “nonhot” (capital gain) components

– Selling partner’s gain is classified as a capital gain or loss portion and an ordinary income or loss amount related to the hot assets

• Effect of hot assets (cont’d)– Must allocate sales price of partnership interest

between “hot” (ordinary income) assets and “nonhot” (capital gain) components

– Selling partner’s gain is classified as a capital gain or loss portion and an ordinary income or loss amount related to the hot assets


Other Dispositions of Partnership Interests (slide 1 of 8)


• Transfer of a partnership interest to a controlled corporation– Tax free if §351 requirements are met– If 50% or more of the total interest in capital

and profits of the partnership are transferred, the partnership terminates

• Transfer of a partnership interest to a controlled corporation– Tax free if §351 requirements are met– If 50% or more of the total interest in capital

and profits of the partnership are transferred, the partnership terminates




• Incorporating a partnership– At least three methods available:

1. Transfer each partner’s interest to the corp in exchange for stock

– Partnership terminates

– Corp becomes owner of all partnership assets

– Corp has substituted basis in assets; Old partners have substituted basis in stock

• Incorporating a partnership– At least three methods available:

1. Transfer each partner’s interest to the corp in exchange for stock

– Partnership terminates

– Corp becomes owner of all partnership assets

– Corp has substituted basis in assets; Old partners have substituted basis in stock




• Incorporating a partnership (cont’d)2. Transfer partnership assets to corp in exchange for

stock and assumption of partnership liabilities– Partnership distributes stock to partners in liquidating

distribution

– Corp has carryover basis in assets; Old partners have substituted basis in stock

• Incorporating a partnership (cont’d)2. Transfer partnership assets to corp in exchange for

stock and assumption of partnership liabilities– Partnership distributes stock to partners in liquidating

distribution

– Corp has carryover basis in assets; Old partners have substituted basis in stock




• Incorporating a partnership (cont’d)3. Partnership distributes all assets and liabilities pro

rata to partners in complete liquidation of partnership

– Partners transfer assets and liabilities to corp in exchange for stock under §351

– Corp has substituted basis for assets; Partners have substituted basis for stock

• Incorporating a partnership (cont’d)3. Partnership distributes all assets and liabilities pro

rata to partners in complete liquidation of partnership

– Partners transfer assets and liabilities to corp in exchange for stock under §351

– Corp has substituted basis for assets; Partners have substituted basis for stock




• Incorporating a partnership (cont’d)– All three methods of incorporating a

partnership are tax-free• Exception: if liabilities of partnership exceed basis

of transferred assets

• Incorporating a partnership (cont’d)– All three methods of incorporating a

partnership are tax-free• Exception: if liabilities of partnership exceed basis

of transferred assets




• Nontaxable like-kind exchange rules do not apply to the exchange of interests in different partnerships

• Nontaxable like-kind exchange rules do not apply to the exchange of interests in different partnerships




• Generally, the gift of a partnership interest is tax-free– Partnership income, loss, etc. is prorated

between donor and donee

• Generally, the gift of a partnership interest is tax-free– Partnership income, loss, etc. is prorated

between donor and donee




• Death of a partner– Taxable year of partnership closes with respect

to that partner on date of death– Compute deceased partner’s share of

partnership income or loss to that date and report on partner’s final Form 1040

• Death of a partner– Taxable year of partnership closes with respect

to that partner on date of death– Compute deceased partner’s share of

partnership income or loss to that date and report on partner’s final Form 1040


§754 Election§754 Election

• Adjusts partnership’s basis in assets to reflect:– The amount paid by the purchasing partner in

excess of his share of the inside basis of partnership assets

– Gain or loss recognized by partner receiving distribution from partnership

– Once made, election remains in effect for all future years unless election revoked with IRS consent

• Adjusts partnership’s basis in assets to reflect:– The amount paid by the purchasing partner in

excess of his share of the inside basis of partnership assets

– Gain or loss recognized by partner receiving distribution from partnership

– Once made, election remains in effect for all future years unless election revoked with IRS consent


Termination of Partnership(slide 1 of 3)

Termination of Partnership(slide 1 of 3)

• Partnership terminates when either of the following events occur:– No part of the business continues to be carried

on by any partners – Within a 12-month period, 50% or more of the

partnership’s capital and profits interests are sold or exchanged

• Partnership terminates when either of the following events occur:– No part of the business continues to be carried

on by any partners – Within a 12-month period, 50% or more of the

partnership’s capital and profits interests are sold or exchanged


Termination of Partnership (slide 2 of 3)


• Partnership tax year closes when:– The partnership incorporates– One partner in a two-party partnership buys out

the other partner

• Partnership tax year closes when:– The partnership incorporates– One partner in a two-party partnership buys out

the other partner




• Partnership tax year usually does not close:– Upon the death of a partner– Entry of a new partner– Liquidation of a partner in other than a two-

party partnership– Sale or exchange of a less than 50% partnership

interest

• Partnership tax year usually does not close:– Upon the death of a partner– Entry of a new partner– Liquidation of a partner in other than a two-

party partnership– Sale or exchange of a less than 50% partnership

interest


Family Partnerships (slide 1 of 3)


• Owned and controlled primarily by members of the same family– Often formed to save taxes by funneling some

of parent’s income to the children

• Often difficult to establish for tax purposes

• Owned and controlled primarily by members of the same family– Often formed to save taxes by funneling some

of parent’s income to the children

• Often difficult to establish for tax purposes




• Family member will be recognized as a partner if:– Capital is a material income-producing factor and

partnership interest is acquired in a bona fide transaction where ownership and control are received

• Can be acquired by gift or purchase from another family member

– Capital is not a material income-producing factor, but family member contributes substantial or vital services

• Family member will be recognized as a partner if:– Capital is a material income-producing factor and

partnership interest is acquired in a bona fide transaction where ownership and control are received

• Can be acquired by gift or purchase from another family member

– Capital is not a material income-producing factor, but family member contributes substantial or vital services




• Kiddy tax may apply to child partner under age 18 and claimed as a dependent by parent-partner

• Family member whose interest is acquired by gift from another family member may only have a portion of partnership income allocated to them– Donor partner must be allocated income

representing reasonable compensation for services rendered to the partnership

• Kiddy tax may apply to child partner under age 18 and claimed as a dependent by parent-partner

• Family member whose interest is acquired by gift from another family member may only have a portion of partnership income allocated to them– Donor partner must be allocated income

representing reasonable compensation for services rendered to the partnership


Limited Liability CompaniesLimited Liability Companies

• A LLC with 2 or more owners is taxed as a partnership– LLC members are not personally liable for

debts of the entity• Effectively treated as a limited partnership with no

general partners

– LLCs are relatively new so there is no established body of case law available

• Makes planning difficult

• A LLC with 2 or more owners is taxed as a partnership– LLC members are not personally liable for

debts of the entity• Effectively treated as a limited partnership with no

general partners

– LLCs are relatively new so there is no established body of case law available

• Makes planning difficult


Limited Liability PartnershipsLimited Liability Partnerships

• Partners are not personally liable for the malpractice and torts of their partners

• Taxable as a partnership

• Conversion of a general partnership into a LLP is not taxable if all of the general partners become LLP partners and hold the same proportionate interest

• Partners are not personally liable for the malpractice and torts of their partners

• Taxable as a partnership

• Conversion of a general partnership into a LLP is not taxable if all of the general partners become LLP partners and hold the same proportionate interest

Chapter 11 Partnerships: Distributions, Transfer of Interests, and Terminations Partnerships:...

Documents

continuing partnership

distribution slide

estates trusts distributions

distributions of cash

partnership capital

ongoing partnership

estates trusts corporations

terminations partnerships

Transcript of Chapter 11 Partnerships: Distributions, Transfer of Interests, and Terminations Partnerships:...

Commissioning Cables and Terminations

Managing Difficult Terminations

Terminations - multimedia.3m.commultimedia.3m.com/mws/media/592246O/12-terminations-emd-2009... · FAX 800-245-0329 264 TERMINATIONS 3M™ Cold Shrink Terminations Over 30 years ago,

Medium Voltage Joints & Terminations

Condominium Terminations (Florida)

Cmbs Terminations

ABAP Program Terminations

Coaxial Terminations & Loads

Qualified Plan Terminations and Partial Plan Terminations · Qualified Plan Terminations and Partial Plan Terminations John P. Griffin, JD, LLM ASC Institute, LLC Agenda •Introduction

Capnut Terminations

wire rope end terminations - The Crosby Group rope end terminations - The Crosby Group

11kV Joints and Terminations

Wire Rope Terminations 22

TERMINATIONS JOINTS

3m MV Cable Terminations

Strike Terminations for Lightning Protection Systems Terminations for... · Strike Terminations for Lightning Protection Systems consisting of a metal rod protruding above a structure.

Fall 2010. Society the thing consists of distributions of interests and distributions of power and society the happening involves interactions among.

CABLE TERMINATIONS A2 EMC

Terminations - Payroll

Life Before Discipline & Terminations