Question

What restrictions might prevent a partner from selling his partnership interest to a third party?

What restrictions might prevent a partner from selling his partnership interest to a third

party?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans:

In the beginning of the partnership,

Agreement specify that, weather a partner may leave the partnership voluntarily or if a partner can assign his interest to third party.

If agreement does not allow for voluntary withdrawl, and free right to transfer the interest to third party,

than only way partner can leave the business is or transfer the right is that , a partnership farm has to be dissolved.

And other partners may not get agreed for dissolution of farm.

Thus, such restriction prevent a partner to sell interest to third party.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What are some of the restrictions that a partner might have trying to sell their partnership...
What are some of the restrictions that a partner might have trying to sell their partnership interest to a third party? Do you think that this is important?
D is a one-third general partner in the DEF partnership. Both D and the partnership are...
D is a one-third general partner in the DEF partnership. Both D and the partnership are cash method, calendar year taxpayers. D dies at a time when the partnership has earned $15,000 for the current year, and his share of the untaxed and undistributed partnership income for the year is $5,000. Under all of the sale or liquidation agreements described below, D is to be paid $30,000 for his interest, which includes his share of income. Immediately prior to D’s...
The following is an example of partnership income allocation: Each partner receives 7% interest on his...
The following is an example of partnership income allocation: Each partner receives 7% interest on his or her beginning capital account balances. Partner A receives a $20,000 salary and 30% of the profit or loss. Partner B receives a 15% bonus on distributable income after interest and salaries and shares in 25% of the profit and loss. Partner C has a profit and loss ratio of 45%. The partners beginning capital balances are as follows: A = $25,000 B =...
W is a partner in the equal WXYZ partnership. At the beginning of the year, his...
W is a partner in the equal WXYZ partnership. At the beginning of the year, his basis in his partnership interest is $50,000. On Jan. 15, W takes a draw against earnings of $45,000. On June 1, the partnership pays off $50,000 of debt. On Sept. 1, W gets a distribution of cash of $35,000 that is a draw against earnings. The partnership’s income from the year is $250,000. What is the effect of each of these items on W’s...
Crane is a partner in the Cardinal Partnership. A dispute arose with the partnership regarding his...
Crane is a partner in the Cardinal Partnership. A dispute arose with the partnership regarding his share of current earnings. The partnership contends that the amount is $75,000, while Crane believes his share is $100,000. Crane ceased being a partner on November 1, 2015. As a result of the dispute, the partnership distributed only $75,000 and placed the disputed $25,000 in escrow. However, Crane's Schedule K–1 from the partnership included the full $100,000. Crane believes that the K–1 should include...
A is a partner in the ABC partnership. Under the partnership agreement A is entitled to...
A is a partner in the ABC partnership. Under the partnership agreement A is entitled to $10,000 each year for his services, which are ordinary in nature and performed in his capacity as a partner. A’s share of the partnership’s profits and losses, after deduction of the services payment, is one third. For 2007 the partnership’s income, before deduction of the $10,000 payment to A, consisted of $4,000 of ordinary income and $15,000 of long-term capital gain. A and the...
Andrew has a $60,000 basis in his one-third interest in the JAS Partnership when he sells...
Andrew has a $60,000 basis in his one-third interest in the JAS Partnership when he sells it to Miguel for $80,000 in cash. Andrew's basis includes his share of liabilities and his share of income up to the sale date. On the sale date, the general partnership reports $30,000 of liabilities and the following assets:          Partnership's Assets Basis FMV Cash $ 51,000 $ 51,000 Receivables -0- 36,000 Land 129,000 183,000 Total: $180,000 $270,000 Required: Determine the amount and the...
Brent is a limited partner in BC Partnership. His distributive share of partnership income and his...
Brent is a limited partner in BC Partnership. His distributive share of partnership income and his guaranteed payment for the year are as​ follows: Ordinary income ​$30,000 Short-term capital gain ​$18,000 Guaranteed payment ​$36,000 What is his​ self-employment income? A. ​$48,000 B. $84,000 C. ​$36,000 D. ​$66,000
Andrew has a $60,000 basis in his one-third interest in the JAS Partnership when he sells...
Andrew has a $60,000 basis in his one-third interest in the JAS Partnership when he sells it to Miguel for $80,000 in cash. Andrew's basis includes his share of liabilities and his share of income up to the sale date. On the sale date, the general partnership reports $30,000 of liabilities and the following assets: Partnership's Assets   Basis       FMV Cash   $ 51,000       $ 51,000 Receivables   -0-       36,000 Land   129,000       183,000 Total:       $180,000       $270,000 Required:...
If the basis of a partnership interest is exhausted, a partner can use loans made to...
If the basis of a partnership interest is exhausted, a partner can use loans made to the partnership to absorb excess losses. True False Jordan and his two brothers are equal owners in Taupe Partnership. If Jordan sells business property (basis of $230,000; fair market value of $280,000) to Taupe for $280,000, he must recognize the $50,000 realized gain. True False Guaranteed payments are deductible by the partnership and are taxable to the partner receiving the payments. True False Guaranteed...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT