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  1. Current Distribution
    A nonliquidating partnership distribution made to a partner (i.e., the distribution does not terminate the partner's partnership interest).
  2. Limited Liability Partnership
    Differs from general partnerships in that with an LLP, a partner is not liable for damages resulting from the negligence, malpractice, or fraud committed by other partners. However, each partner is personally liable for his/her own negligence, malpractice, or fraud.
  3. Limited Partnership
    A partnership with 2 classes of partners, with at least one general and at least one limited partner. A limited partner generally cannot participate in the active management of the partnership, and in the event of losses, generally can lose no more than his/her capital contribution.
  4. Liquidating Distribution
    A single distribution, or one of a planned series of distributions, that completely terminates a partner's interest in the partnership.
  5. Partnership ordinary income or loss
    All partnership items that do not have to be separately stated (because they have no special tax characteristics) and can be combined and just the net amount is passed through to partners.
  6. Sec. 751 Property
    A partnership's unrealized receivables (including the recapture potential in depreciable assets) and appreciated inventory. The gain on sale of a partnership interest generally must be recongnized as ordinary income to the extent of the selling partner's share of unrealized receivables and appreciated inventory. These assets are sometimes referred to as hot assets.
  7. Sec. 754 election
    An optional election that can be made by a partnership to adjust the basis of its assets to prevent any inequities that might occur as a result of the partnership's distribution of property or the sale by a partner of a partnership interest.
Card Set
Partnership Taxation
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