#partnerships
Partnership accounting, profit sharing, and financial management
Phantom income is taxable income with no matching cash — K-1 allocations, forgiven debt, OID. The IRS taxes the gain; plan liquidity to pay it.
TIC interests are deeded real estate, not partnership shares — so they can qualify for Section 1031 deferral if the co-ownership meets IRS ruling conditions.
Section 1061 grants carried interest long-term rates only when assets are held over 3 years; otherwise the manager's profit share is taxed as ordinary income.
Teaming agreements give zero affiliation shelter; small-business JVs exempt members; only a mentor-protege JV lets a large firm bid as small.
TurboTax Business guides first-timers, H&R Block bundles the 1040, TaxAct undercuts both — pick US entity software by forms, e-files, and support.
A shotgun clause lets one 50/50 LLC member name a buyout price the other must accept or match — a fast deadlock exit, if you avoid the valuation traps.
Foreign co-owners make LLC profit effectively connected income: Section 1446 withholding, a 1040-NR filing, and a 30 percent branch tax for corporations.
A US investment club is a partnership from the first deposit — Form 1065 is due March 15 every year, and filing late costs $255 per partner per month.
The IRS treats most joint ventures as partnerships: keep separate books, track capital accounts, and file Form 1065 by March 15.
US law bars non-CPAs from owning an attest practice, so every CPA-firm PE deal splits in two — and only 30–50% of the headline price is cash at close.
Item L reports tax-basis capital, not your outside basis — the IRS excludes partnership debt, so a negative ending balance is usually arithmetic, not alarm.
Under ASC 323, dividends from a 20–50% stake are not income — they reduce the investment. Here are the three journal entries and the basis-difference trap.
