I am working on a paper for my Advanced Partnership Taxation course. Please define/explain in detail the following:

-If a partnership agreement contains special allocations that do not have substantial economic effect, what are the consequences?

-Please discuss the different ways a payment to a retiring partner may be treated.

-Discuss a situation in which a partner could recognize gain on a partnership distribution even if no cash is distributed to the partner.

-For a special allocation of partnership items among the partners to be respected by the IRS, the special allocation must have substantial economic effect. Please explain how a partnership can meet the “economic effect” portion of the substantial economic effect requirement.

-Explain how a partnership would fail the “substantiality” portion of the substantial economic effect requirement.

-The substantial economic effect requirement will nevertheless be met for nonrecourse deductions if the partnership agreement contains a minimum gain chargeback. Explain generally what a minimum gain chargeback is.

-Define a Section 754 election. What does a Section 754 election allow a partnership to do?

-What does “QIO” stand for in the context of economic effect? Explain what a QIO provision causes the partnership to do. Why would members of an LLC be particularly interested in a QIO as opposed to the alternative under the general test for economic effect? -Regarding the “substantiality” prong of the substantial economic effect test, explain what “shifting” tax consequences are and what “transitory” allocations are.

Answer rating: 100% (QA)

1 According to section 7041b2iii states that if an allocation has no economic impact it shall nevertheless be deemed to have economic effect provided that as of the end of each partnership taxable yea... View the full answer