Family Limited Partnerships

Paper Summary:

This paper provides a review of the relevant literature to determine when a family limited partnership is appropriate. The paper analyzes the pertinent laws, including an examination of the Internal Revenue Code, regulations, case law and other rulings and matters that are relevant to a family limited partnership in general and tax planning in particular, to provide a comprehensive survey of the taxability of this business form. The paper concludes with a summary of the research and salient findings.

Outline:
Introduction
Review and Analysis
Analysis and Discussion
Conclusion

From the Paper:

"Beyond the foregoing considerations involving the selection of appropriate structures, funding mechanisms and the tax advantages of using family limited partnerships as a business form, Crayne (2001) emphasizes that the implications of the personal use of partnership property by one or more partners for income tax purposes remains uncertain. In the corporate context, the preponderance of the precedential law to date suggests that the personal use of corporate-owned property may result in deemed income or dividends to certain shareholders; however, the authoritative guidance on the income tax implications of the personal use of corporate-owned property may not be completely relevant to the personal use of partnership-owned property because, under state law, all partners in the family limited partnership have an equal right to use all partnership property (Crayne, 2001)."

Sample of Sources Used:

• Black's law dictionary. (1990). St. Paul, MN: West Publishing Co.
• Burkert, R. P. (2003). A good deal depends on preparation: CPAs can help client-owners of closely held entities tidy up their businesses for a sale. Journal of Accountancy, 196(5), 47.
• Crayne, R. K. (2001). Family limited partnerships funded with personal use property. Journal of Accountancy, 191(4), 76.
• Dedon, J. (1991). Protecting personal assets; It's vital to safeguard personal property before problems occur. Journal of Accountancy, 172(1), 60.
• Ellner, C. (1994). There's gold in the health-reform hills. ABA Banking Journal, 86(2), 62-3.

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