presentation is about Partnership contributions (basis, gain/loss)
scenario:
Client A, B and C would like to form a limited partnership with each partner owning 1/3 of the partnership. The partnership has taken a loan of $20,000 from the bank. Client A is contributing 100,000 in cash, Client B is contributing some land they have owned for 5 years with a basis of $ 20,000 and accounting services and Client C is a limited partner that has invested $100,000 into the partnership.
The clients are wondering what the difference is between outside and inside basis and what the tax basis is for each of them. The clients wonder what tax implications are on gains and losses on property contributions. Client B is wondering if they should sell their land first and contribute the cash or contribute the land instead. The clients are also wondering what flow-through income should be recognized, if there are any self employment taxes on the income and any loss limitations associated with it.
- Difference between outside and inside basis.
What is each partner’s tax basis?
- Tax implications on gains and losses on property contributions
Client B asks if they should sell their land first and then contribute the cash or contribute the land instead.
- What flow-through income should be recognized?
Are there any self employment taxes on the income and any loss limitations associated with it?
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