|
#1
02-28-2005, 06:57 PM
| |||
| |||
 Re: Partnership Basis Question. "LSarrett[at]gmail.com" <LSarrett[at]gmail.com> wrote: - quote - > Limited Partnership is formed with 2 LP's and a GP. GP puts
Sorry. You lost me when you stated the GP had a negative> in 1%, LP's put in remaining 99%. They purchase a piece of > property which will be subdivided and sold off. The deal is > that proceeds are allocated in ratio to the capital > contributed up to the level that the all partners receive > 100% of their initial contribution. After that the GP gets > 30% and the remaining LP's split the 70%. Say original > purchase price is $100k. They sell the 1/4 of the property > for $100K in year one. They are each paid their initial > contribution and profits are reported as $75k allocated by > the original contribution percentage. > As the remaining property is sold in future years, the > proceeds are split 30/70 as indicated above. This results > in the GP having negative basis (and the GP reports the > appropriate capital gains for cash received in excess of > basis). When the last piece of the property is sold, the > LP's will still have positive capital accounts. Am I > correct that at this time the LP's will be permitted to take > the capital loss? basis after being allocated a much greater that proportionate ownership share of income. -- David M. Woods, EA, ChFC, CLU Woods Financial Services Norwood, MA 02062 www.woods-financial.com << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
|
02-28-2005, 06:19 PM
| |||
| |||
| Re: Partnership Basis Question. "LSarrett[at]gmail.com" <LSarrett[at]gmail.com> wrote: - quote - > Limited Partnership is formed with 2 LP's and a GP. GP puts
Yes. I do wonder, though, why the extra payment to the GP> in 1%, LP's put in remaining 99%. They purchase a piece of > property which will be subdivided and sold off. The deal is > that proceeds are allocated in ratio to the capital > contributed up to the level that the all partners receive > 100% of their initial contribution. After that the GP gets > 30% and the remaining LP's split the 70%. Say original > purchase price is $100k. They sell the 1/4 of the property > for $100K in year one. They are each paid their initial > contribution and profits are reported as $75k allocated by > the original contribution percentage. > As the remaining property is sold in future years, the > proceeds are split 30/70 as indicated above. This results > in the GP having negative basis (and the GP reports the > appropriate capital gains for cash received in excess of > basis). When the last piece of the property is sold, the > LP's will still have positive capital accounts. Am I > correct that at this time the LP's will be permitted to take > the capital loss? isn't handled as a Guaranteed Payment for services. That would keep the profit allocations in line with capital accounts, and the LP's wouldn't be stuck with a capital loss down the road that could take many years to soak up at $3,000 per year. -- Tom Healy, CPA Boulder, CO Web: http://www.tomhealycpa.com << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
|
#-1
02-27-2005, 02:12 PM
| |||
| |||
| Partnership Basis Question. Limited Partnership is formed with 2 LP's and a GP. GP puts in 1%, LP's put in remaining 99%. They purchase a piece of property which will be subdivided and sold off. The deal is that proceeds are allocated in ratio to the capital contributed up to the level that the all partners receive 100% of their initial contribution. After that the GP gets 30% and the remaining LP's split the 70%. Say original purchase price is $100k. They sell the 1/4 of the property for $100K in year one. They are each paid their initial contribution and profits are reported as $75k allocated by the original contribution percentage. As the remaining property is sold in future years, the proceeds are split 30/70 as indicated above. This results in the GP having negative basis (and the GP reports the appropriate capital gains for cash received in excess of basis). When the last piece of the property is sold, the LP's will still have positive capital accounts. Am I correct that at this time the LP's will be permitted to take the capital loss? << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| basis, partnership, question |
Similar Threads | ||||
| Thread | Forum | Replies | Last Post | |
| sale of partnership asset with inside outside basis difference bm30003700@aol.com: My client has a 50% interest in a partnership. The partnership's only asset is an office building. My client's wife passed away in 2003 and the... | Taxes | 2 | 02-21-2005 07:25 AM | |
| ltd partnership basis gypman: I have a Ltd Partnership (a realestate investment trust) that has been a dog. I got an offer to buy it for $100 per share. ( I have 10 shares so... | Taxes | 1 | 02-18-2005 10:17 AM | |
| Thread Tools | |
| Display Modes | |
| |
Linear Mode
