Series 65 - Partnerships
One disadvantage of investing in a general partnership versus a limited partnership is that
All general partners have unlimited liability
Flow through tax structure
Flow-through tax structure. Income, capital gains, and capital losses are passed directly on to the investors and reported on their personal income tax returns.
A disadvantage of investing in a general partnership versus a limited partnership is:
General partners have unlimited liability
C Corporations are taxed by
• Double taxation
An S Corporation is characterized (4)
• Limited Liability • 100 or fewer shareholders • Flow-through tax treatment - Continuity of life
Limited Partnerships are taxed
• Pass through entities for tax purposes - all passed through to the partners who declare the income on their own tax returns
Investing in a limited partnership is (4)
• passive activity • Investors must understand the tax treatment for partnerships • Income and losses generated by the partnership is absorbed by the investor • All tax information to be reported on Form K-1 by the partnership
The advantage of investing in a limited partnership include:
The ability to limit risk
What is the liability for loss for an investor in a limited partnership?
The investor's basis
Do S Corporations pay fed taxes on earned income?
• Does not pay fed corp taxes on income earned
What are the advantages of a limited liability company (LLC) compared to an S Corporation?
A simpler managerial structure