PLEASE PROVIDE ANSWERS FOR EACH QUESTION AND PLEASE NO HAND

PLEASE PROVIDE ANSWERS FOR EACH QUESTION, AND PLEASE NO HAND WRITTEN ANSWERS..

DISCUSSION 1:

Discuss the formation of a partnership. Is any gain or loss recognized? Explain.

How do taxation for the corporate form and taxation for the partnership form differ?

Can a partner have a salary from a partnership? Why? What is a guaranteed payment?

If a partner owns a 20% interest, does that necessarily mean that he or she will receive 20% of the net income from the partnership? Explain.

Solution

Partnership is a form when two or more persons decide to carrying a business togattog.it is association of persons who have agreed to carry on a joint business.

Formation - it should be based on agreement.

It may be oral or written.

There must be free or genuine consent of partners.

The object of partnership should be lawful and other legal formalities should be filed.

Important things to form a partnership-

Association of more than one person.

Result of an agreement.

Agreement to carry on some business.

Sharing of some profits.

Mutual agency.

2- if any gain or loss from the distribution is recognised by the partners,it must be reported on his or her return for the tax year in which the distribution is received.

3- yes partners can take salary. As partner act as a principle as well as agent ,due to this repatrelatio as an agent partner can take salary.

4-Guaranteed payment means \"first priority distribution\", payments to a partner meant to compensate a partner for service or use of capital.such payments made without regard to the partnership profitability.