Compensating Partners for Use of Property

Partnerships often use property owned by or contributed by partners. Valid compensation strategies in such instances require careful advance planning to avoid the disguised sales rules created by Congress and the IRS to correct abuses in this area. Professor Richard W. Harris walks practitioners through the potential minefields of IRC §§ 707(a), 707(c), and 702(a) with numerous examples and sample calculations that show how to avoid problems. This article from a recent issue of CCH’s Journal of Passthrough Entities, covers payments, preferential distributive shares and disguised sales of property. Harris outlines strategies for avoiding the disguised sale rules and looks at what fits under the definition of “reasonable” compensation.

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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.

Read this article from CCH’s Journal of Taxation of Financial Products.

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Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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