A Partnership With Multiple Partners: Good or Bad?
The generally favorable federal income tax rules for partnerships are a common reason for choosing to operate as a partnership with multiple partners instead of as a corporation with multiple shareholders. The most important partnership tax benefit rules can be summarized as follows: You get pass-through taxation. You can deduct partnership losses (within limits). You may be eligible for the Section 199A tax deduction. You get basis from partnership debts. You get basis step-up for purchased interests. You can make tax-free asset transfers with the partnership. You can make special tax allocations. Partnership taxation is not all good stuff. There