ACC 410 Chapter Notes - Chapter 20: Tax Basis, Nonrecourse Debt, Ordinary Income
Document Summary
Flow through entities with multiple owners are governed by two somewhat different sets of rules. General partnerships, limited partnerships, and llc"s are generally treated as partnerships under the rules provided in subchapter k. Whose owners elect to treat them as flow-through entities are classified as such under rules in subchapter s s-corps. Entity: treat tax partnerships as entities separate from their partners. Aggregate: treat partnerships simply as an aggregation of partners separate interests in the assets and liabilities of the partnership. When a partnership is formed, and afterward, partners may transfer cash, other tangible or intangible proper, and services to the partnership in exchange for equity interest is called a partnership interest. Capital interest: an economic right attached to a partnership interest giving a partner the right to receive cash or property in the event the partnership liquidates; is synonymous with the liquidation value of a partnership interst.
