Chapter 20 Flashcards
Forming and Operating Partnerships
1
Q
Flow-Through Entity Definition
A
Legal entities, like partnerships, LLC’s, and S-Corps, that do not pay income tax. Income and losses from flow-through entities are allocated to their owners.
2
Q
Entity Approach
A
a theory of taxing partnerships that treats partnerships as entities separate from partners
3
Q
Aggregate Approach
A
a theory of taxing partnerships that ignores partnerships as entities and taxes partners as if they directly owned partnership net assets
4
Q
Partnership Interest Definition
A
an intangible asset reflecting the economic rights a partner has with respect to a a partnership, including capital interest and profits interest
5
Q
Capital Interest
A
Economic right attached to a partnership interest giving the partner the right to receive cash or property
