DPP's Flashcards
Main reason to buy a DPP?
Economic viability
Rights of GP in DPP?
- Can charge a management fee
- Bind partnerships into contracts
- Decide when cash distributions to be made
- Which partners should be included
Difference between recourse and non-recourse loans?
Recourse is when the lender can go after more of your assets. Non-recourse they just take the collateral and have higher rates.
What is DPP?
Venture to let investors participate directly in the cash flow and tax benefits of underlying investment.
Otherwise known as?
LP’s
For an LP to be taxed as a partnership, they have to avoid looking like a corporation. What things?
- Centralized management
- Providing limited liability
- Never ending life (Most avoidable)
- Free transferability of a partnership interest (Most avoidable)
What order of disolvement?
1) Secured Lenders
2) Other creditors
3) LP’s
4) GP
When an LP certificate is recorded, must be filled within how many days?
30 days
A subscription for an LP is accepted when?
The GP signs the subscription agreement
Real Estate LP’s provide investors with what benefits?
- Capital growth potential
- Cash flow (income) from rents
- Tax deductions (from mortgage interest expense and depreciation allowances for wearing out the building)
IDC’s - Intangiable drilling costs? (Write offs)
100% tax deductubale.
- Wages
- Supplies
- Fuel Costs
Tangiable drilling costs? (Salvage value)
- Storage tanks
- Weellhead equipment
Which oil & gas LP programs provide tax credits to partners?
- Rehab of historic properties
- Goverment assisted housing
Benefits of funcional allocation?
- LP’s receive tax write offs from IDC’s
- GP’s receive write of from tangiable costs over years
How is economic viablity measured?
- Cash flow analysis (compares revenues to expesnses)
- IRR (value of future revenues and sales proceeds)
