Tax Planning for Partnerships

Free CPA TCP (Tax Compliance & Planning) lesson in Entity Tax Planning. 17 min read, ~2,616 words.

§721 grants nonrecognition on property contributions with no control requirement (unlike §351); the partner takes a substituted basis equal to the contributed property's basis. Inside basis (partnership's basis in assets) and outside basis (partner's basis in interest) are tracked separately; outside basis equals contributed basis plus cash minus net liability...