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Flashcards in REG Notes Deck (4):

For partnership it's always basis in property you contribute (not FMV)
Holding period (not sure what his means) of a partnership interest for capital assets includes period held by partner. This is important because it determines whether it's long or short term gain or loss. Section 1223 and 1231

Anything else contributed (non-capital, service for example) is the value at the date of the transfer. Plus it doesn't qualify for non-recognition, it's taxable!


Partnership - Informal - Unlimited Liability

As debt of partnership goes up, basis goes up because at risk for more, in other words, basis means the amount of skin you have in the gain

1065 extension period is now 5 months, because they have to file K-1 and people got the k-1 on the same day their tax return is due

Outside Basis (to the individual partners)

Initial Contribution (CO Basis/CO holding same as owner for capital assets - Srvcs FMV)
+ % Share of Profit or Loss (something about separately stated and munis)

Inside Basis (to the parntership)
Property Contributed + All the income it earns etc.

Basis in Received Asset: They give partner an asset, if it's a non-liquidating distribution, pick it up as lower inside or outside, if it's liquidating the partner's basis goes to 0


Guaranteed Payment = ordinary income to partner, expense to partnership

Not based on income, should be for services or use of capital (like a salary), part of net business income

So it's called a "separately stated" item on 1065 that you pay income on even if the partnership has a loss

1065 Partnership
Rent Expense
Guaranteed Payment (not separately to partnership but to partner ordinary expense 2 part)

Net Business Income
Capital Loss
Net Income


Separately Stated
Above the line to the partnership - above net business income before taxes?and?
Below the line to the partner

I please
Less D
Plus L
Minus LC

Initial Basis
Plus % P & L, Munic Bond Interst, Separate Items
Less Distributions
Plus % of Partnership Liabilities
Less Liabilities Contributed to Partnership
Ending Outside Basis