Hello and welcome to this session, chapter 21. In this session, we will look at partnership - the overall partnership and familiarize ourselves with the terms used throughout this chapter. It is important to watch this recording and also read your textbook. So, what is a partnership? It is an association between two or more persons to carry out a trade. It is a meeting of minds between individuals or companies. Partnership is formed by contributing money, property, and labor. We will discuss how it is formed later. Partnership expects to share profits and losses. There are rules that we need to be familiar with. We will also examine profit and losses separately later. For tax purposes, partnership can include a syndicate group, pool joint venture, or a general partnership. We will focus on different types of partnerships related to taxation. In the textbook, partnership is referred to as LLC. We will learn more about LLC later. A general partnership consists of at least two general partners. These partners are jointly and severely liable. Creditors can collect money from both partners and their personal assets are at risk. LLC combines the benefits of limited liability and taxation of a partnership. Unlike a corporation, income is subject to only one-time taxation. LLC can have a special allocation of income, losses, and cashflow, which we will discuss later. Owners are called members, not partners, but they receive important partnership tax treatment. Limited partnership has at least one general partner and occurs when one group has money and the other has skills. The people with skills become the general partners, responsible for the business, while people with money become limited partners. Limited partners are liable only to the extent of their investment. LLP (limited liability partnership) is a partnership where partners are not...
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Video instructions and help with filling out and completing Are Form 1120 Schedule M 3 Entity
