AgVenture.Alternatives.2006.02.22

AgVenture.Alternatives.2006.02.22 - Farm Business...

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Farm Business Arrangement Alternatives
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Four Basic Types p. 1 Sole Proprietorship Partnership Corporation Limited Liability Company
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Sole Proprietorships p. 1 One owner who has full control Liable for all debts of the business No formalities are required to form a sole proprietorship Owner pays tax on all business income
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Partnerships p. 1 A partnership is an association of two or more persons sharing the profits and losses from a business.
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Partnerships pp. 1-2 General partnership All partners are liable for partnership debt Limited partnership At least one general partner At least one limited partner
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Income Taxation of Partnerships p. 2 Partnership does not pay taxes Partners report their shares of income or loss Gain or loss is not recognized when assets are transferred into or out of a partnership
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Example 1 p. 2 FMV of land $600,000 Partner’s basis 50,000 Realized gain $550,000 Recognized gain 0 Partnership’s basis $ 50,000
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This note was uploaded on 08/08/2008 for the course AAE 320 taught by Professor Mitchell during the Spring '08 term at Wisconsin.

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AgVenture.Alternatives.2006.02.22 - Farm Business...

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