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I found the source which is related to my recent assignment, but it is not full essay. Can someone help me find the full version of this essay?
I found the source which is related to my recent assignment, but it is not full essay. Can someone help me find the full version of this essay?
Memorandum
DATE: February 4, 2011
TO: Callaway Real Estate Limited Partnership
FROM: Chia Blais
RE: 2010 Taxable Income
FACTS:
Callaway was formed in January 1st 2010 with the purpose of purchasing, constructing, and managing residential real estate. On February 2, 2010, Callaway purchased an apartment complex for $5,000,000 with a recourse mortgage of $4,500,000. The allocation for depreciation on the building is $4,000,000 allowing $145,455 annually.
Tambour properties is a 5% corporate general partner, the partnership agreement provides that they (Tambour) will manage and supply all the services essential to the operation of the partnerships real estate. Tambour will receive an annual management fee equal to 5% of the gross rental income earned by the partnership.
Dr. Samantha Ashin is a limited partner that contributed land with a basis of $125,000 and a fair market value of $275,000 for a 38% interest in the partnership. The partnership agreement states that limited partners cannot be called upon to make additional capital contributions in the future. The partnership agreement also contains a “qualified income offset” to satisfy the alternate test for economic effect.
ISSUES:
1. Is Tambour Properties acting in capacity as a partner or non partner and is the payment to Tambour Properties for management services considered distributive shares of the partnership or guaranteed payments.
2. What is the taxable operating loss and allocation to Callaway LP and Tambour Properties.
3. What is the taxable operating loss and allocation to Dr. Ashin that is allowable after limitation of loss rules are recognized.
CONCLUSIONS:
1. Tambour Properties is performing on –going services that are integral to the business and acting in capacity as a partner. The payments received by Tambour are guaranteed payments under section 707(c). The compensation for services is payable without regard to the partnership income.
2. The...
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