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What are the two most common 707(a) payments that a partnership would make to a partner...

What are the two most common 707(a) payments that a partnership would make to a partner of the partnership?

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Answer #1

707(a): Partner not acting in capacity as partner.

If a partner engage in a transaction with a partnership other than in the capacity as a member of such partnership, the transaction shall, except as otherwise provided in this section, be considered as occuring between the partnership and one who is not a partner.

If a partner is not acting in his capacity as a partner, the transaction is treated as taking place between the partnership and a third party. Relevant transaction include:

- Loan to or from the partnership

- Sales to or from the partnership.

- Service to or from Partnership.

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