REG — Quick Sheet
Partnership Taxation
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- §721: no gain on contribution, no control requirement (unlike §351's 80%)
- Outside basis includes share of partnership liabilities; increases = deemed contribution, decreases = deemed distribution
- Guaranteed payments: fixed regardless of income; deductible by partnership, ordinary + SE income to partner
- Cash distributions tax-free to basis, excess = capital gain
- Hot assets (§751): unrealized receivables + appreciated inventory → ordinary income on sale of interest
- Loss limits in order: basis → at-risk → passive