CHAPTER 11 Notes - CHAPTER 11 NOTES TAX 4001 2011/2012...

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CHAPTER 11 NOTES TAX 4001 2011/2012
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Major Concepts Entities Taxed As Partnerships Taxation of Partnership Income Ordinary Income vs. Separately Stated Items Loss Limitations Guaranteed Payments Partnership Basis Rules Related Party Rules
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Entities Taxed as Partnerships Partnerships Cost sharing agreements are not partnerships Key is joint management and sharing of profits Electing Entities Limited Liability Partnerships (LLP’s) Primarily for professional services Owners are partners Limited Liability Corporations (LLC’s) May conduct a variety of activities Owners are members (more like a
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Taxation of Partnership Income Reporting Entity vs. Taxpaying entity Partners cannot be employees Payroll taxes for partners are paid by the partners on Self Employment Income Fringe benefits cannot be paid for partners Partnership Items Flow-thru to partners Some elections are required at the
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CHAPTER 11 Notes - CHAPTER 11 NOTES TAX 4001 2011/2012...

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