Class 5c Partnerships Formation

Class 5c Partnerships Formation - Taxation of the Business...

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Unformatted text preview: Taxation of the Business Entity Online Lecture Series Presented by Akore Berliner, CPA Formation & Capitalization of a Partnership Tax Consequences of Formation • Usually, no gain or loss is recognized by a partner or partnership on the contribution of money or property in exchange for a partnership interest • Gain (loss) is deferred until taxable disposition of: ▫ Property by partnership, or ▫ Partnership interest by partner • Partner’s basis in partnership interest = basis of contributed property ▫ If partner contributes capital assets and §1231 assets, holding period of partnership interest includes holding period of assets contributed ▫ For other assets including cash, holding period begins on date partnership interest is acquired ▫ If multiple assets are contributed, partnership interest is apportioned and separate holding period applies to each portion Partner’s Ownership Interest • Each owner normally has a: ▫ Capital interest  Measured by capital sharing ratio  Partner’s percentage ownership of capital...
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This note was uploaded on 08/11/2011 for the course ACCT 103 taught by Professor Huxhold during the Spring '11 term at San Diego.

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Class 5c Partnerships Formation - Taxation of the Business...

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