Type and timing of partnership distributions can increase tax benefits to the partners

Article Abstract:

Partners in a business partnership can reduce their tax burdens by timing their partnership distributions carefully. Partners' adjusted basis is determined by making adjustments to their original contribution. The necessary adjustments include: adding additional contributions; subtracting current distributions; adding partnership taxable income, exempt income and excess deductions; and subtracting nondeductible expenses, partnership losses, and advances. The main goal in planning distributions is to avoid or delay recognizing partners' gains. Gains can be avoided or delayed by: delaying distributions if they will exceed partners' adjusted basis; making any distributions before the partnership's tax year-end property distributions; and distributing loans or promissory notes to partners if cash distributions would make them recognize a gain.

Analysis, Partnership, Partnerships

---

Planning property transfers to maximize depreciation deductions after TRA '86

Article Abstract:

Taxpayers can defer gain recognition on property transfers by either contributing property to an entity or exchanging for like-kind property. Each transfer method will produce different depreciation deductions for the taxpayer. The method selected depends on the particular needs of the taxpayer; different transfer methods may preserve an ACRS election, reduce alternative minimum tax, or avoid short year rules. The timing of the transfer may also avoid additional depreciation limitations.

Laws, regulations and rules, Tax planning, Depreciation

---

Similar abstracts:

• Abstracts: New law taxes excess distributions and contains additional restrictions on plans. Rules on plan distributions and rollovers modified by new law, but many options remain
• Abstracts: Funding R & D through limited partnerships. Middle-market firms find Exim pilot fills trade finance gap
• Abstracts: The price of a place in the sun. Offices: profit by design. Moving offices is a major operation

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.