DESCRIPTION
This module focuses on the different ways that partners receive payment from a partnership (outside of distributions since they are covered in a separate module). The main methods of payment discussed in this module include guaranteed payments, payments made to partners acting outside of a partner’s capacity, and compensatory partnership options. However, we also discuss the important disguised sales and disguised services anti-tax provisions.
LEARNING OBJECTIVES
- Discuss the tax treatment and characteristics of §707(c) Guaranteed Payments.
- Discuss the tax treatment and characteristics of § 707(a) payments and disguised services.
- Investigate the disguised sales rules.
- Recognize the different tax characteristics between profit and capital partnership interests.