Tax Services for Partnership by Walnut Creek CPA Firm

Serving the areas of Berkeley, Concord, Oakland, San Ramon and Walnut Creek

Partnership Overview

A partnership is a business with more than one owner that has not filed papers with the state to become a corporation or LLC (limited liability company). There are two basic types of partnerships -- general partnerships and limited partnerships. The general partnership is the simplest and least expensive co-owned business structure to create and maintain. However, there are a few important facts you should know about the personal liability of general partners.

Partnership Taxes

A partnership is not a separate tax entity from its owners; instead, it's what the IRS calls a "pass-through entity." This means the partnership itself does not pay any income taxes on profits. Business income simply "passes through" the business to the partners, who report their share of profits (or losses) on their individual income tax returns. In addition, each partner must make quarterly estimated tax payments to the IRS each year.

While the partnership itself doesn't pay taxes, it must file IRS Form 1065, an informational return, each year. This form sets out each partner's share of the partnership profits (or losses), which the IRS reviews to make sure the partners are reporting their income correctly.  The return must be signed by a general partner. If a limited liability company is treated as a partnership, it must file Form 1065 and one of its members must sign the return.

At Capital Tax & Accounting we will go over the key element to tailor your business needs.

  • Partnership Distributions
  • Transactions Between Partnership and Partners
  • Basis of Partner's Interest
  • Partnership Gains and Losses.
  • Partnership Agreement .
  • Community Property
  • Marketable securities treated as money
  • Loss on Distribution
  • Net pre-contribution gain
  • Guaranteed Payments
  • Capital material/nonmaterial
  • Capital interest
  • Gift capital interest
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