TAX Assignment

A.)

1. What Code Section discusses partnership formation under the Internal Revenue Code?

2. How does this Section differ from a corporate formation under Section 351?

3. What does it mean when we say that a partnership is a pass-through entity? Is it better for an entity to be a pass-through entity? Why or why not?

B.)

1.) Find a tax case on the internet that deals with partnership issues.

2.) Provide a citation for the case.

3.) Summarize the issues and explain what the controlling tax law consists of. This for example may be Section 721 or some Treasury Regulation or a Revenue Ruling for example.

4.) State how the court opined on each of the tax issues involved.

C.)

1. Please explain what a partnership agreement is? What does a partnership agreement usually include?

2. What is the significance of having a general partnership vs. having a limited partnership?

3. How does a partnership report income for tax purposes? What forms are used?

4. Please explain what a guaranteed payment is. How is it reported to the partners? How do the partners report it?

5. What expenditures would a brand new partnership incur? How would the costs be treated for tax purposes?