Limited Partner
About Limited Partner:
Limited (special) Partner is, within a limited partnership, a part owner whose liability is limited to the amount invested and whose role in business management is restricted. Tax law generally treats income or loss from limited partnerships as passive income (loss), which is not allowed to offset active income or portfolio income. Contrast general partner.
Description and Definition of Limited Partner
Limited partners do not play an active role in the business and have limited liability for losses of the partnership. Profits and losses are passed on to limited partners. By definition limited partnerships are passive investments. Consequently, a limited partner's deductible losses are restricted under the passive loss rules.
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