Purchase Solution

What is a partnership interest; rights it confers; basis

Not what you're looking for?

Ask Custom Question

What is a partnership interest, and what rights does it confer to the partner? What are inside basis and outside basis, and why are they important?

Purchase this Solution
Solution Summary

The 540 word solution fully explains the questions and uses numerous examples for better understanding.

Solution Preview

What is a partnership interest, and what rights does it confer to the partner?

A partnership interest represents a part ownership in an entity. It is designed to be a percentage interest, and an individual may, for example, own 16.67% of a partnership. That actually means that the individual partner owns an undivided 16.67% interest in the net assets of the partnership.

Rights conferred to a partner will vary depending on whether the partner is a general or limited partner. Rights will be further defined by whether the partner has a controlling interest or not.

For example, a general partner owning 16.67% cannot control the activities of a partnership without a coalition of partners who represent control, but each partner has a voice in management and an equal right to participate.

A limited ...

Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Introduction to Finance

This quiz test introductory finance topics.

View More Free Quizzes
Related BrainMass Solutions

  • Uniform Partnership Act of 1997

    What is the Uniform Partnership Act of 1997 and what is the relevance to partnership accounting?

  • What are the tax consequences of liquidating a partnership?

    It might have to do with inherited basis, or a purchase/sale of an interest outside the partnership. A second common occurrence is that the basis tracked at the partnership level is either missing or incorrect.

  • This post addresses multiple partnership & S Corp questions.

    a. Kevin's basis in his partnership interest is $130,000. b. Chuck's basis in his partnership interest is $100,000. -- it appears that this is the same as #4. c. Greg's basis in his partnership interest is $60,000. d.

  • Gains recognized for significant experience

    Section 712 of the Internal Revenue Code provides, in general, that no gain or loss is recognized when property is contributed to a partnership in exchange for a partnership interest. What basis will Ben take in his partnership interest?

  • Partnership recognize gain or loss as a result of this distribution

    If this is a proportionate non-liquidating distribution, what is the tax effect of the distribution to Monica and MIP? After the distribution, what is Monica's basis in the inventory and in her MIP interest? b.

  • Partnership Basis vs Stock Basis in S-Corps

    In summary, the outside basis of a partnership is what tax rules say investment in the partnership is worth-- Outside Basis= [Initial Investment + Profit(Loss) - Distributions]. (IRS, 2008).

  • RB Partnership: Basis and Taxable Items

    If the entity had a medical reimbursement plan, it is possible the treatment might have been different, but it appears to be simply a draw from the partnership for personal reasons.

  • Partnership Distribution: Liquidating and Non-liquidating

    She contributed a parcel of this land (basis $40,000; fair market value $48,000) to a partnership, which will also hold it as inventory. After three years, the partnership sells the land for $60,000.

  • Partnership's Income and Partner's Basis

    She has a $75,000 basis in her partnership interest at the end of the year after all income/loss items have been passed through to her. What was her beginning-of-the-year basis in her partnership interest? a.

View More Related Solutions