Partnerships Chapter 3

Partnerships Chapter 3 - OPERATIONS OF A PARTNERSHIP Click...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Click to edit Master subtitle style 1/21/11 OPERATIONS OF A PARTNERSHIP Chapter 3
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1/21/11 Tax Consequences to the Partnership Section 701 Aggregate theory Partners, not the partnership, are taxed Section 702(b) Aggregate theory Determines separately stated items on Form 1065 Character of certain types of income carries through to partners Section 703 Entity theory Partnership chooses its accounting methods 2 2
Background image of page 2
1/21/11 Revenue Ruling 68-79 Long-Term Capital Gains Realized by Partnership: Flow through to partner Retain character Even if partnership interest is short-term 3 3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1/21/11 Demirjian v. Commissioner Facts: Anne and Mabel Demirjian Each own 50% of stock of Kin-Bro Realty Corporation Acquired office building in 1944 Building condemned in 1962 Split involuntary conversion proceeds Planned to reinvest proceeds under Section 1033 Proceeds must be invested in substantially equivalent property Within one year They reinvested as individuals rather than as partners 4 4
Background image of page 4
1/21/11 Demirjian v. Commissioner Question: Findings: 5 5
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1/21/11 Schneer v. Commissioner (1991) Facts: Schneer was an associate in BSI, but he resigned When he resigned, he was entitled to receive a percentage of fees: From clients he had referred to the firm For other consulting services he was obligated to perform for BSI for those clients He then became a partner in B&K and SSG&M. Under the partnership agreements of these firms: He turned over the fees he received from BSI Fees were then allocated out to all the partners 6 6
Background image of page 6
1/21/11 Schneer v. Commissioner (1991) Question: Findings: 7 7
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1/21/11 Schneer v. Commissioner (1991) Should Schneer be allowed to characterize fees as partnership income? No requisite or direct relationship to partnership’s business Revenue Ruling 64-90 If cash basis partner pools service income with others in cash basis partnership: Income is considered partnership income if paid to the partnership Fees need not be reported separately by the partner on individual return Partner’s distributive share of partnership income will be reported on his return Court agreed with Schneer He should be able to consider this income of his new partnerships 8 8
Background image of page 8
1/21/11 Schneer v. Commissioner (1991) Was there an assignment of unearned income?
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/20/2011 for the course ACC 617 taught by Professor Staff during the Fall '08 term at Kentucky.

Page1 / 30

Partnerships Chapter 3 - OPERATIONS OF A PARTNERSHIP Click...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online