TAX 4001 Lecture Notes - Lecture 11: Limited Liability Partnership, Limited Liability Company, Limited Liability
Document Summary
Advice on studying: look back at class notes and focus on 12, 14 & 15. Look back at major topics (big picture) from past tests. Two or more people joining together to do business. Does not have to be formal (doesn"t even have to be in writing) Limited partnership- similar to investors, don"t run day to day operations, no liability beyond contributions. Limited liability partnership- professional partnership, partners are not responsible for the general acts of other partners related to their profession. Limited liability company- has owners with no liability to owners or entity, favorable but it is hard to receive credit. Flexible allocation - can allocate income and expenses in many different ways as long as partners agree. Each partner has a basis in their ownership. When partner acts as an employee for the partnership. Reported as ordinary income by partner performing services. Formed the same way as a c- corp (filing a form)
