Direct Participation Programs

Question 1

What is an partnership agreement/Subscription agreement?

Answer 1

Attest to net worth

Understands risk

Question 2

When do you become a Limited Partner in a D.P.P?

Answer 2

`When the GP signs the Partnership agreement

Question 3

What is a Limited Partnership in a DPP?

Answer 3

Business entity that customers use as investment
Provide Capital to GP
Have no management role
RISK: loss of investment

Question 4

What does a GP do in a DPP?

Answer 4

Manages the partnerships assets

Assumes full responsibility

Question 5

What is the liquidation priority in a DPP?

Answer 5

Creditors
Limited Partners
GP

Question 6

Limited Partnerships have what benefits

Answer 6

Pass through of tax benefits
Capital appreciation (Real Estate DPP
Income Generation (Existing Properties, depreciation on buildings, tax benefits/losses)
Historical & Low $ Housing: provide tax credits (decrease tax amount)

Question 7

REITS

Answer 7

Have no pass through of tax

Question 8

What is wildcatting?

Answer 8

Exploring for oil and gas

risky

Question 9

What is Developmental oil and gas

Answer 9

Knowing that it is there and have the benefits of IDC’s - wages and fuel
* may be subject to AMT

Question 10

What is income from oil and gas?

Answer 10

Oil producing DPP

Question 11

What is your biggest consideration when it comes to DPPs

Answer 11

Profit motive FIRST