Liquidating limited partnerships

To view this Portfolio, take a free trial to Bloomberg BNA Tax & Accounting This Portfolio is available with a subscription to Bloomberg BNA Tax & Accounting, a comprehensive research solution including over 500 Tax Management Portfolios, practice tools, primary sources and timely news. 716-2nd, Partnerships — Current and Liquidating Distributions; Death or Retirement of a Partner, provides a detailed discussion of the tax consequences of distributions by partnerships to partners, including those arising from distributions of a partner's share of the results of partnership operations, and other distributions by the partnership that do not result in termination of the distributee's interest in the partnership even though accompanied by a change in the distributee's and remaining partners' shares of capital or profits and losses, whether in money or property — all called current distributions — and distributions of money or property on the withdrawal of a partner whether on death or withdrawal — called liquidating distributions.

Correctly drafted, assets transferred to the limited partnership become fully protected and beyond the reach of any future creditor.Most asset protection attorneys share our view that the limited partnership and the LLC are generally the most advantageous domestic entities for protecting assets.When a business operates as a partnership, the partners each report a percentage -- which is usually the same as their percentage of ownership -- of annual earnings on their personal returns.As a result, the tax effects of a partnership that makes liquidating distributions only impacts the partners who receive them.It summarises some of the rules that apply to corporate voluntary arrangements, moratoria, administrations, receivers, voluntary liquidations, compulsory liquidations and EC regulations.

The limited partnership has become the cornerstone for protecting domestic (U. With the limited partnership, you can maintain complete control over your assets as the general partner and indirectly own the assets through ownership of a limited partnership interest.As with all other aspects of partnership taxation, the dual nature of a partnership for tax purposes — as at times an aggregation of its partners, and at times an entity — complicates the discussion, particularly because no one, including the author, has been able to articulate a comprehensive statement of when the aggregate, and when the entity, aspect should predominate. Further complication arises because the “tax” partnership includes not only entities organized as general partnerships or limited partnerships (“LP”) under state law, but also the newer forms of limited liability partnerships (“LLP”), initially primarily for professionals, and the increasingly popular limited liability company (“LLC”). Adjustment to Partnership's Basis in Assets Under 734(b) 1. A judgment creditor of a limited partner can only have the court issue a charging order against the limited partnership interest.The charging order gives the creditor only the right to claim profit or liquidation distributions payable to the limited partner.The value of marketable securities, such as stock investments that are traded on a public stock exchange, and decreases to your share of the partnership's debt are both treated as cash distributions.