Cara, a CPA, established an accounting system for the ABC Partnership and, in return for her services, received a 10 profits interest (but no capital interest) in the partnership Her usual fee for the services would be approximately $20,000 No sales of profits interests in the ABC Partnership occur...

Is the receipt of a profits interest in the ABC Partnership in exchange ...

Cara, a CPA, established an accounting system for the ABC Partnership and, in return for her services,

Question:

Cara, a CPA, established an accounting system for the ABC and, in return for her services, received a 10% profits interest (but no capital interest) in the Her usual fee for the services would be approximately $20,000. No sales of profits interests in the ABC occurred during the current year. What tax issues should Cara and the ABC consider with respect to the payment made for the services?
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...