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Taxes: Transactions with Partners Flashcards Preview

REG > Taxes: Transactions with Partners > Flashcards

Flashcards in Taxes: Transactions with Partners Deck (2)
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1

Taxes:
Transactions with Partners
Guaranteed Payments

Guaranteed Payments
- made to partners without regard to partnership income
- received for services or capital investment
- ordinary income to recipients at year-end
- reduce partnership income and therefore reduce each partner's distributive share
- deemed paid on last day of tax year, regardless of date of payment

2

Taxes:
Transactions with Partners
Built-In Gains & Losses

Built-In Gains & Losses
- allocated back to contributing partners when property is sold
- up to gain/loss realized on sale
- character is determined by use to partnership
Exceptions
1. sales of contributed ordinary income or loss property (inventory or AR), generate ordinary gain/loss to contributing partner (limit 5 years) (no time limit for AR) then all gain/loss is ordinary
2. same for contributed capital assets

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