3 Direct Participation Partnerships Flashcards by Brandy S

Q

LP

A

Limited Partner

owener - income or loss on personal tax return

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Q

LP

Max Loss

A

amt invested

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Q

General Partner (GP) / Sponsor

A

at least 1% financial int

unlimited liability

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Q

LP Powers (2)

A

vote on

suing GP
dissolving partnership

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Q

Passive Income

can be offset by

A

passive losses

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Q

FINRA requirement of GP

A

provide #s to LP

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Q

Risk per industry

oil | real estate

High

to

Low

A

Oil

exploratory
developmental - drill where oil has been found before
income - existing production

Real Estate

raw land
new construction
existing properties

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Q

tax credit

A

takes amt off taxes owed

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Q

tax deduction

A

takes amt off income

(non taxable income)

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Q

which is better?

tax credit

or

tax deduction

A

credit

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Q

Govt Assisted Housting

gets

tax credit or deduction?

A

tax credit

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Q

subscripton agreement

A

investor signs & attests

to net worth & understands risk

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Q

syndicate / sponsor fee for selling

A

10%

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Q

specified program

A

partnership assets disclosed

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Q

blind pool offering

A

assets not disclosed

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Q

Offering Doc

overriding royalty interest
functional allocation
reversionary working interest
disproportinate working interest

A

GP not responsible for costs

only share of rev when oil sold

Q

Offering Doc

overriding royalty interest
functional allocation
reversionary working interest
disproportinate working interest

A

GP pays for equipment / capitalized costs.

LP pay ded exp / intangible (labor, fuel, rent)

Q

Offering Doc

overriding royalty interest
functional allocation
reversionary working interest
disproportinate working interest

A

LP pays all costs

GP gets share of income after LP costs are covered

Q

Offering Doc

overriding royalty interest
functional allocation
reversionary working interest
disproportinate working interest

A

GP rcvs disproportionate share of income

bears little costs

Q

subscripton agreement

signed by

A

investor & GP