Netters, Nice to see Dana Overall and I on the same side for once. We both agree that while Partnership agreements are relatively simple, unless the person knows what they are doing, they should retain an attorney. The few dollars spent are well worth it for the peace of mind involved in knowing it is done correctly and future problems are avoided. We also agree that the EAA or the AOPA can probably recommend an attorney with experience in aviation matters.
Dana is also correct that Revenue Rulings are not binding and do NOT carry the same weight as Statutes, Regulationa and case law. However, they are the position of the IRS and usually give a person great guidance as to likely IRS administrative actions. Where a revenue ruling that is on point can be found it is certainly prudent to follow it in doing planning unless there is an extremely good reason [compelling legal authority] to do otherwise. Nice to see everyone working together again to help someone on the net with an aviation related [in this case legal] problem. I will continue to keep my mouth shut unless I have something positive to contribute. Regards, Dean Allen --- Dana Overall <bo12...@hotmail.com> wrote: > >11. Partnerships are excellent for asset protection. A partner in a > >partnership > >is almost impossible to collect money from even if you win a lawsuit > >against > >one. However, the IRS has issued a Revenue Ruling that the party "winning" > >the > >lawsuit and obtaining a charging order against the partner has > >"constructive > >receipt" of the income WHETHER THEY EVER COLLECT IT OR NOT! They then owe > >federal income taxes on phantom income they never receive. The result is > >VERY few lawsuits against partners in partnerships. > > > Time to slow down a little on this one, nice post but as a note to anyone > considering such an agreement: > > An IRS Revenue Ruling, I haven't looked this one up, holds no basis for > legal adjunction or basis to support one's position. It is nothing more > than than an "opinion" issued by the service as a result of a request by an > entity seeking such. This allows the seeker of the ruling to legally file > an informational return without fear of fraud penalties upon future rulings > of the service. In the same breath, the IRS is not legally obligated to > stand by a revenue ruling in the case requested nor any future or past > instances. > > The proof of uncollectability is basis for the writing off of uncollectable > accounts receivable. This proof can be based on liquidity, continued > existance or a variety of positions. Numerous examples of case law > substantiate this position and would hold precedence. Since individuals are > considered by the IRS to be "cash basis" entities then the mere existance of > a favorable judgement is not receipt of income and will not be considered as > income for tax purposes. This would certainly not be an issue with my > counsel to a client interested in relief. > > Once again, seek legal counsel in your state of residence. Partnership > agreements or exculpability agreements are relatively cheap to have drawn up > and, in my opinion well worth the counsel to have an agreement drafted to > meat one's individual needs. The above information is not legal counsel and > cannot be used as such as dictated by the Kentucky Bar Association or The > Kentucky State Board of Accountancy. I am only licensed to practice within > the Commonwealth of Kentucky. > > > > Dana Overall > 1999 & 2000 National KR Gathering host > Richmond, KY > RV-7 slider/fuselage, Imron black, "Black Magic" > Finish kit ordered!! Buying Instruments. Hangar flying my Dynon. > http://rvflying.tripod.com > do not archive > > _________________________________________________________________ > Get McAfee virus scanning and cleaning of incoming attachments. Get Hotmail > Extra Storage! http://join.msn.com/?PAGE=features/es > > > _______________________________________________ > see KRnet list details at http://www.krnet.org/instructions.html __________________________________ Do you Yahoo!? The New Yahoo! Shopping - with improved product search http://shopping.yahoo.com
