Are there any self-employment taxes on the income and any loss limitations associated with it?

Economics

Acct Powerpoint

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?