Multi-tier partnerships can pay general partners for results and avoid guaranteed payments

Article Abstract:

Multi-tier partnerships can be structured so that general partners' compensation may be based on their individual performance, yet keep this compensation from being classified as a guaranteed payment. If it is classed as a guaranteed payment a number of advantages are lost such as the ability to distribute appreciated assets on a tax-free basis. A non-tiered partnership can only secure these benefits if payments are based on its net income which may obscure the performance of individual partners.

Limited partnership, Limited partnerships, Partnership distributions

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Foreign irrevocable life insurance trusts can save estate and income tax

Article Abstract:

Foreign irrevocable life insurance trusts (ILITs) can be used for tax advantages towards income, gift, estate and transfer taxes. Estate taxes under section 2042(2) can be avoided if the settler is not a trustee. A generation skipping transfer tax exemption can be worked out and excise taxes under section 1491 can be avoided. Income taxes are affected by eliminating Crummey withdrawal powers although this may compromise gift and estate taxes, so careful planning is required.

Methods, Estate planning, Life insurance trusts

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Abandoning interests may save taxes for investors in troubled partnerships

Article Abstract:

Partners in troubled real estate may realize a tax advantage by abandoning the property or declaring it worthless. Abandonment requires an expression of intent followed by confirming actions. Taking a deduction for worthlessness requires a proven date and a genuine lack of value. The typical method of tax planning is to sell the property at a loss, but these methods could be more profitable.

Real estate limited partnerships

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