21.1 PARTNERSHIPS

Question 1

WHAT ARE THE CHARACTERESTICS OF A PARTNERSHIP?

Answer 1

Question 2

WHAT ARE SEPARATELY AND NONSEPARATELY STATED ITEMS IN A PARTNERSHIP?

Answer 2

SEPARATELY STATED ITEMS REPRESENT ITEMS THAT ALLOW SPECIAL TREATMENT ON THE PARTNERS OWN TAX RETURN.

NONSEPARATELY STATED ITEMS ARE ORDINARY BUSINESS NET INCOME/LOSSES

Question 3

HOW DO DETERMINE THE INCOME REPORTED BY A PARTNER ON AN INDIVIDUAL TAX RETURN FOR PARTNERSHIPS?

Answer 3

DISTRIBUTIONS ARE GENERALLY A RETURN OF CAPITAL (NOT TAXED) TO THE PARTNER REDUCING EACH RECEIVING PARTNER’S TAX BASIS IN THE PARTNERSHIP.

IF DISTRIBUTIONS EXCEED THEIR PARTNERSHIPS INTEREST THEY ARE CONSIDERED CAPITAL GAINS.

THEY USUALLY ARE NOT INCLUDED IN AGI UNLESS THEY ARE CAPITAL GAINS

FYI - CASH DISTRIBUTIONS TO PARTNERS ARE NOT AN EXPENSE OF THE PARNTERSHIP.

Question 4

WHAT ARE GUARANTEED PAYMENTS?

Answer 4

• DOES NOT EFFECT PARTNERS TAX BASIS

Question 5

WHAT IS THE TREATMENT OF RECOURSE AND NONRECOURSE LIABILITY FOR INCREASING A PARTNERS BASIS.

Answer 5

BOTH RECOURSE AND NONRECOURSE DEBT INCREASES THE BASIS OF THE GENERAL PARTNER,

HOWEVER BECAUSE THE LIMITED PARTNER HAS LIMITED LIABILITY ONLY NON RECOURSE DEBT IS ADDED,

Question 6

WHEN IS UNANIMOUS CONSENT OF ALL GENERAL PARTNERS REQUIRED?

Answer 6

Question 7

STOP SUBTRACTING THE GUARANTEED PMTS WITH A BASIS CALCULATION?

Answer 7