Admission of a partner to a service partnership: resolving the tax problems

Article Abstract:

A new partner's entry into a service partnership which has accounts receivable and earned fees subjects the new partner and existing partners to certain tax conditions. These cover the application of tax regulations, transfers of unrealized receivables and contributions of cash basis receivables by the new partner. In such partnerships, partners are expected to render services on a regular basis and capital is not a vital income source.

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Disallowance of losses and deferral of deductions in partnership transactions

Article Abstract:

Tax laws governing disallowance of loss and deferral of accrued payments which cover transactions between partners, partnerships and related persons are complex. These laws must be revised to apply consistently to such transactions. The Internal Revenue Code's sections 707 and 267 can be modified for that purpose. Tax advisers dealing with such transactions must ensure that concerned parties are penalized correspondingly.

Laws, regulations and rules, Deferred income (Business), Deferred income

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