Comprehensive Problem 83: Comprehensive Questions And Answers
Chapter 19 Comprehensive Problem 83
Identify significant tax and non tax issues of concerns that may differ across entity types.
Limited Partnership:
Tax issues and concerns: Partners will pay taxes on profits they receive from their investments. Tax liability is determined by tax basis base on original investments. In this case Dawn is 30%, Linda is 30% and Mike is 40%. Partners need to pay taxes on income whether they receive this income or reinvested back into the business. General or active partners must also pay self employment taxes.
Non tax issues and concerns: General or active partners are responsible for the companies liabilities. Even those liabilities incurred form a limited partner. In this case there is an $800,000 mortgage
Identify significant tax and non tax issues of concerns that may differ across entity types.
Limited Partnership:
Tax issues and concerns: Partners will pay taxes on profits they receive from their investments. Tax liability is determined by tax basis base on original investments. In this case Dawn is 30%, Linda is 30% and Mike is 40%. Partners need to pay taxes on income whether they receive this income or reinvested back into the business. General or active partners must also pay self employment taxes.
Non tax issues and concerns: General or active partners are responsible for the companies liabilities. Even those liabilities incurred form a limited partner. In this case there is an $800,000 mortgage