Chapter 16 - Chapter 16 Definition of Partnership An...

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Chapter 16Definition of PartnershipAn unincorporated association with two or more persons who associate for a profitmotiveoFor income tax purposes, partnerships are generally treated as pass-throughentities, the partnership pays no taxes, and partnership income (loss) andseparately stated items are allocated to each partner according to thepartnership’s profit sharing agreement.oThe partners receive separate K-1 schedules from the partnership. Each K-1reports each partner’s share of the partnership net profit and separately reportedincome and expense items. Then partners report these items on their own 1040tax returns.Tax YearsMajority Interest Taxable Year:Partnerships are generally required to elect the sametaxable year as their partners who represent a majority interest on the first day of thepartnership’s first tax yearFive Percenters’ Common Tax Year:If there is no majority interest taxable year, the

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Term
Fall
Professor
fabioambrosio
Tags
Accounting, Taxes, Generally Accepted Accounting Principles, partner, partnership net profit

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