Partnership Flashcards
How is partnership’s basis in property contributed calculated?
Upon a partnership formation the partnership’s basis in the assets received from the contributing partners is the basis in the hands of the partner.
What are guaranteed payments?
Services or the use of capital without regard to partnership income.
When is gain recognized in a liquidating distribution?
Gain is recognized on a partnership distribution ONLY if the cash distributed exceeds the basis in the partnership interest.
What are hot assets?
“Hot Assets” for a partnership include ONLY inventory and unrealized receivables.
Are guaranteed payments taxable to the partner?
Guaranteed payments are taxable as ordinary income to the partner and are deductible by the partnership.
Is there gain or loss for non-liquidating distributions?
In general, no gain or loss is recognized b the partnership o the partner for a proportionate non liquidating distribution. Unless, the cash distributed to the partner exceeds basis in the partnership immediately before the distribution.
