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Funding the Family Limited Partnership



A limited family partnership is usually financed with specific assets. Real estate is an ideal investment, but not all assets are suitable for transport to the community. S-corporation can not maintain these with respect to business partners. In return for their interests in associations, when they bring assets into society, they do not recognize profit or loss. Additional capital contributions do not generate a profit or loss for the partners or the community.

When a partner contributes to the capital or real estate of the company, the company is interested in the contribution of the company as a percentage of all contributions to the partner. Each additional contribution increases the participation in the partnership and other activities must be adjusted accordingly.

Donation to partnerships

The easy distribution of community interests in units provides an opportunity to transfer assets to family members in the year 2014-2015 as part of the annual deduction contribution of $ 14,000 per year or $ 5,340,000 in 2014 and $ 5,430,000 to 2015 . Assessment is allowed that can be used to reduce the value of association units to 20 to 40 percent for voluntary tax purposes.

In general, three types of evaluation techniques are used to calculate the fair market value of participation in the controlled unit. The market method (also known as comparative sales law) is similar to a company that is closely monitored with the value of the unrecognized shares of similar companies of comparable value to known companies.



Income (or cash flow rebate) method reduces the present value of future earnings of the company, whose shares are valuable. In general, the value of the net asset value (or balance sheet) is based on the value of the assets of the company.

The method of market or method of income is most often used when a real estate company participates in an active business or commercial activity. The value of pure assets is often used when an owner of a limited property owns fixed assets or investment property and does not participate in an active business or commercial activity.

The value of the gift for the Undertaker is the correct market value of the gift when it is created, and not the correct market value or possible. In Revenue Decree 93-12, the IRS accepts that in the limited partnership with the limited partner the minority interest qualifies for exemption from the applicable market value of the underlying asset. This allows parents to give their children much more than tax benefits on donations and loss of control.

In order to qualify for exemption, the partnership partner’s interest must be regarded as minority interest (non-audit exemption) and / or independently transferable (non-marketing deduction). IRC has a 362036 (B) gift in the taxable ownership of a shareholder subsidy in a controlled company, in which the donor has retained the voting rights on shares. There is no relevant section in the tax code for the interests of the association.




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