AFM 461 Final: Chapter 18 summary notes Chapter 18–Partnerships and Trusts Summarized version of chapter 18 to quickly read through and understand. Useful for reading over before exams and as a refresher.

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM 461
• Professor: Stanley Laiken

Document Summary

Joint and several liability with respect to debts incurred by the partnership. An agreement indicating the method by which profits and losses are to be shared. A right of mutual control and management of the enterprise. A limitation of the objective to a single undertaking or a limited number of undertakings. Income under division b is calculated at the partership level, then divied off to owners based on contract to be taxed. That owner may take the income/losses allocated to them and manage it with their. Own income/losses (offset partnership rental income with personal rental losses) You cannot allocate partnership income/loss in a way that is to avoid taxes. Where partners do no deal at arms length, each person"s capital contribution, work performed, and other factors will be considered in determining a reasonable splitting computation of taxable income. Charitable donation tax credit flow through to partners according to share of partner"s income.