Further guidance on limited partnership classification

Article Abstract:

The continuity of life element of the corporate characteristics listed by the IRS as determinative of whether an entity is subject to corporate taxation is particularly important for limited partnerships. To avoid the corporate taxation that associations are subject to, the limited partnership agreement should be structured so that the death, retirement or incapacity of a general partner will dissolve the partnership unless a majority of remaining partners agree to continue the limited partnership.

United States, Laws, regulations and rules

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Service partners clarified - Mark IV Pictures on appeal

Article Abstract:

The Eighth Circuit Court of Appeals in 1992 upheld the Tax Court's 1991 ruling in Mark IV Pictures, Inc v Commissioner concerning the right of service partners to receive partnership interests. However, the Eighth Circuit also resolved the many vague and impractical elements in the Tax Court's decision. In particular, the Eighth Court unambiguously declared the legal viability of drafted partnership contracts that allow limited partners to get back their portion of capital proceeds.

Cases, Contracts

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Ruling comes to grips with handling a partnership's cancellation of indebtedness income

Article Abstract:

Debt restructurings of troubled real estate partnerships have become more common in a soft real estate market. Revenue Ruling 92-97 suggests the possibility of allocating cancellation of indebtedness income to the insolvent partner as long as the solvent ones can live with the risk that they may at some point have to make a cash payment to replenish negative capital accounts.

Management, Extinguishment of debts, Debt cancellation, Finance, Real estate investment, Real estate investments

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