Partnership
Partnership means:
an organization of two or more persons (individuals or companies) who pool some or all of their resources, abilities, and skills in a business and divide the profit or loss in predetermined proportions. Association of two or more person formed for the purpose of making a profit. A partnership can be a general partnership or a limited partnership depending on the extent of each party's liability. A partnership may be a syndicate, group, pool, joint venture, or other unincorporated organization. Partnerships are generally not taxed but serve as conduits through which partnership income, losses, and other tax related items are passed to the partners, who include them on their personal tax returns. A general partnership is characterized by the unlimited liability of the general partners for partnership debts. Partners are individually responsible for the debts of the partnership. In a limited partnership, however, the limited partners generally assume no monetary responsibility beyond the capital originally contributed. Generally, partners cannot deduct tax losses beyond their tax basis in their partnership interest. They may add their pro-rata share of mortgage debt to their investment contribution to determine basis. The death of a general partner or the sale or exchange of 50% or more of the total interest in capital and profits normally terminate the partnership. Former IRC (check if this IRC provision is current here) §7701(a)(2). Also see: Limited partnership.
U.S. and other Developed Countries International Tax Meaning
Some countries treat a partnership as a separate taxpayer and may subject it to tax on its income and losses as a corporation. Other countries do not consider a partnership to be a separate legal entity and the partnership is treated as tax transparent, with each individual partner being taxed on his share of the profits according to his interest in the partnership. Taxation of partnerships is addressed in the Commentary to Article 1 of the OECD Model.
See Inheritance Tax and Inheritance Tax.
Description and Definition of Partnership
A partnership is an unincorporated business, investment organization, or income producing entity that has more than one owner who share profits and losses. A partnership is not subject to tax but passes income, deductions, losses, credits, and other tax items through to its partners according to the terms of the partnership agreement. Owners are usually personally liable for the partnership's debts.
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