For example, co-ownership of property maintained and rented or leased is not a partnership unless the co-owners provide services to the tenants.
A limited liability company (LLC) is an entity formed under state law by filing articles of organization as an LLC.
Unlike a partnership, none of the members of an LLC are personally liable for its debts.
If a family member (or any other person) receives a gift of a capital interest in a partnership in which capital is a material income-producing factor, the donee's distributive share of partnership income is subject to both of the following restrictions. The father performed services worth $24,000, which is reasonable compensation, and the son performed no services.
For purposes of determining a partner's distributive share, an interest purchased by one family member from another family member is considered a gift from the seller. The $24,000 must be allocated to the father as compensation.
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