PARTNERSHIP IS REQUIRED TO PROVIDE AN INFO RETURN TO EACH PARTNER: A) If all the partners are corps: 5 months from fiscal yr end B) Where are partners are ppl: MARCH 31ST following the DEC 31 yr end C) In every other case, the EARLIER OF A) AND B) If all partners are individuals, the partnership is exempt from these requirements ^ if:
FUTURE YEARS MORE THINGS ● THERE IS NO COMPUTATION OF TAXABLE INCOME AT THE PARTNERSHIP LEVEL (JUST NET INCOME) ● LOSSES CARRIED FORWARD OR BACKWARD ARE NOT DEDUCTIBLE BY THE PARTNERSHIP, BUT ARE ALLOCATED TO THE PARTNERS AT YR END ● (LIMITED PARTNERS ARE RESTRICTED TO THEIR AT RISK AMOUNT THO) ● THINGS THAT TRIGGER TAX CREDITS (LIKE DONATIONS/GIFTS/DIVIDENDS/FOREIGN INC→ FOREIGN TAX CREDITS) ARE ALLOCATED TO THE INDIVIDUAL PARTNERS BASED ON THEIR SHARE OF THE PARTNERSHIP'S INCOME) ● WHEN DIVIDEND INCOME IS ALLOCATED TO A PARTNER, IT MUST BE GROSSED UP BY THE USUAL RULES WHEN IT'S INCLUDED IN THE PERSON'S INCOME ● PARTNERS (OTHER THAN CORPS) MAY CLAIM A TAX CREDIT FOR POLITICAL CONTRIBUTIONS MADE BY THE PARTNERSHIP (SAME FOR THE INVESTMENT TAX CREDIT) ● LIMITED PARTNER’S ABILITY TO DEDUCT AN AMOUNT FOR INVESTMENT TAX CREDIT MAY BE RESTRICTED TO THEIR AT RISK AMOUNT EXAMPLE PROBLEM 18-2 …. WHY ARE THEY DEDUCTING THOSE THINGS? PARTNERSHIP INTEREST Property of a partnership is owned by the partnership, not the partners Thus any gains or losses on disposition of prop is included in the partnership's net income PARTNERSHIP INTEREST IS CAPITAL PROPERTY, SO ITS HAS AN ACB (AND U CAN CALC THE GAINS AND LOSSES WHEN U SELL IT) COMPUTATION OF THE DISPOSITION OF A PARTNERSHIP INTEREST IS: Proceeds received LESS: ACB: (ORIG COST OF PARTNERSHIP INTEREST W/ ADJ FOR EARNINGS/DRAWINGS) (SELLING EXPS) = PARTNERS CG OR CL
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- Spring '19
- Stephen Hudovernik