Check out BUY/ SELL agreements, Virg
On Mon, 6 Oct 2003 10:09:18 -0700 (PDT) Aggie lewanda <[email protected]> writes: > > --- Dan Heath <[email protected]> wrote: > > I see some mention of Revenue regarding such partnerships. I > would assume > > that there would be no revenue, so why is it an issue? The only > purpose > > that Jerry or I would have for forming a partnership would be so > that we > > would be protected from that L word, as much as possible, and to > see to it > > that no one tried to take the plane from either of us in the event > that > > something real bad happened to either one of us. > > > > N64KR > > > > Daniel R. Heath - Columbia, SC > > > > [email protected] > > > > Dan, > > The revenue comes into it indirectly in two ways. > > First, by definition, a "partnership" is two or more > partners pooling capital in an effort to make a > profit. In reality, there are plenty of partnerships > to hold assets, family limited partnerships used in estate planning > & so forth that make little or no profit and to the layman > are certainly not businesses for profit. > > Second, as I mentioned one of the asset protection > angles is that a plaintiff with a charging order against > a partner can, according to the IRS, have constructive > receipt of phantom income which he never recieves but > is taxed on. That possibility is usually more than enough > to scare off predatory plaintiff lawyers. No guarantees > of course. > > Finally, you are correct that partnerships are not taxed > even if they make profits. The profits (or losses) are passed > through to the individual partners. This is documented on a form > K-1 > and each individual partner shows his distributed share of > the profits (or losses) on his personal 1040 tax return. > > Finally, I repeat, get legal advice on this. Everything I say is > only for information and not legal advice. > > Also, remember that the Limited Partnership (the kind you want) > is created pursuant to state statute and must be filed with the > Sec. of State. The legal formalities are few and simple, but > they must be complied with or the partnership may be treated > as a general partnership (bad, bad, bad from a liability > standpoint). > > A good lawyer can also advise you on estate planning aspects of the > partnership. If you die, is your wife going to stay in the > partnership > and fly the plane? If so, perhaps she should be a partner too. > On the other hand, if her interest will be liquidated and she is > not > a pilot there is no point. Same for the other partner & spouse. > > Is your partnership going to include a buy-out agreement where the > other partner buys your part in the event of some defined thing > happening > (such as when you die)? If the amounts involved are more than each > partner can afford easily, does funding a buy-out agreement with > an insurance policy make sense (common sense tells me probably not > on a > single KR-2). > > Lots of little things like that which you may not think of. > Good counsel will guide you to think of them, look at your fact > situation and derive a plan that works for you and your partner. > > Hope this is helpful. > > Regards, > > Dean Allen > > > > > > __________________________________ > Do you Yahoo!? > The New Yahoo! Shopping - with improved product search > http://shopping.yahoo.com > > _______________________________________________ > see KRnet list details at http://www.krnet.org/instructions.html > >
