Partnership and Limited Partnership

Question 1

What is a partnership?

Answer 1

A relationship between 2+ persons carrying on a business

Question 2

For tax purposes when does a partnership dissolve?

Answer 2

Agreement, court order or otherwise discontinued
AND
The business will not continue to be carried on

Question 3

What is the treatment of disposal to associated persons?

Answer 3

Deemed MV disposal, Partners deemed to repurchase at MV

Question 4

What are the exclusions of disposal to associated persons?

Answer 4

Spouse dies

Disposal under RA

Question 5

What is a limited partnership?

Answer 5

Is a separate legal person from partners, must have a separate written partnership agreement

Question 6

Liability of a limited partner?

Answer 6

Treated as investor only, (Limited liability)

Question 7

Liability of General Partner?

Answer 7

Treated as managing the business (Unlimited LIability)

Question 8

How are inc/exp dealt with in LP?

Answer 8

LP allocated Inc/exp to partners based on interest, Partners pay tax on theor share of LP income?

Question 9

What are the Lp deduction rules?

Answer 9

Deductions must Be < Partners basis

Disallowed deductions can be carried forward to future income

Question 10

What is the treatment of the dissolution of an LP?

Answer 10

To a person not associated (TAX)

To associated person (TAX at MV)