Partnerships can survive the bankruptcy of a general partner

Article Abstract:

Partnerships increasingly are facing the problem of dealing with the bankruptcy of a corporate general partner while the partnership itself is not bankrupt. Sound planning for partnerships should anticipate the bankruptcy of a partner. Partnership agreements typically contain provisions covering the dissolution of a partnership upon the bankruptcy of a partner. In addition, the agreement should consider the reconstitution of the partnership without winding up the business within a specified period. If the agreement does not contain bankruptcy provisions, it should be amended to include a provision relating to the death or bankruptcy of a general partner and providing for the continuation of the business by surviving or solvent partners.

Bankruptcy

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Family real estate partnerships much less attractive as a result of recent changes

Article Abstract:

Family real estate partnerships face limits on income shifting and elimination of the estate freeze to minimize taxes on an estate. Guidelines are presented to set up partnerships that can still be beneficial. Gift tax considerations are important for all partnerships. Recognition of partnership requires that all terms of 'arm-length' transactions must be fair, determinable, and genuine. The donee's partnership interest must be real and able to be ascertained, although leveraged capital is not addressed in the government regulations. Retention of certain controls by the donor will cause the donee's interest in the partnership to be disregarded.

Methods, Estate planning

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Property acquisitions by partnerships affected by partners' tax status

Article Abstract:

The basis rule for property acquired by a partnership is cost, plus or minus applicable basis adjustments, as described in Sections 1011 through 1024 of the Internal Revenue Code. However, when the partnership acquires property from one of the partners, the transaction is also subject to special rules found in Subchapter K. The unforeseen complications that may arise from property transactions between partners and their partnerships are discussed.

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