What flow-through income should be recognized? Are there any self-employment taxes on the income and any loss limitations associated with it?

Your presentation will be structured as a response to a “client question”. You will develop a presentation to answer this question. Topic is Partnership Contributions)

Client senario: Client A, B and C would like to form a limited partnership with each partner owning 1/3 of the partnership. The partnership has taken a loan of $20,000 from the bank. (do PowerPoint slides on client B and C and include notes on what to say on my presentation)

• Client A

$100,000 cash contribution

• Client B

Contributing some land they have owned for 5 years with a basis of $ 20,000 and accounting services

• Client C (limited partner)

Investing $100,000 into the partnership.

Client questions

• Difference between outside and inside basis – NC
• What is each partner’s tax basis? – NC
• Tax implications on gains and losses on property contributions.

Client B asks if they should sell their land first and contribute the cash or contribute the land instead.

• What flow-through income should be recognized?
• Are there any self-employment taxes on the income and any loss limitations associated with it?