Discussion:Corporation owns a partnership
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Discussion Forum Index --> Tax Questions --> Corporation owns a partnership
Www.cpa1.biz (talk|edits) said: | 8 April 2009 |
| Almanacers,
I wanted to confirm this: A corporation owns a partnership. The corporation has 0 basis in the partnership and shows a big loss for 2008. The partership gaves distributions to the corporation. There are no recourse loans or any basis like I said. My colleuge thinks these distributions are taxable to the corp because they exceed the corps basis of that partnership and it is a distribution. Please tell me if you have ever run into this and how we could avoid the corp from paying taxes on excess of basis distributions. | |
| 8 April 2009 | |
| I don't get what the problem is: they got more money out of it than their basis in it. They SHOULD be paying taxes.
If they don't want to pay taxes then have them get rid of the partnership that is throwing off so much cash flow. Why are some clients so dumb about economics? A dollar minus 35 cents tax still leaves 65 cents in your pocket. DUH! | |
EKelley737 (talk|edits) said: | 9 April 2009 |
| Looks like the corporation got it bassackwards. Put money into partnership to get losses, not take money out. If an S corporation owns partnership for more than one year income is long term capital gain, if owned less than a year income is short term capital gain. | |
