Dan, I'll not address the liability issue as this has been hashed over on this forum in great detail. If you only want to form a partnership to document the sharing of expenses and protecting the surviving partner, just have a partnership agreement drafted. Your counsel will be able to address such issues as the sharing of expenses, right of first refusal if a partner desires to sell his share, address remainder beneficiary ownership issues, address a fair market value formula at partnership liquidation, approval of partner use of the airplane, etc. Having such issues addressed up front may be of value too you, then again it may not be. This document is a different animal than the formulation of an entity to address liability issues.
We weren't talking about income recognition from any partnership revenue generating venture. 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 >From: "Dan Heath" <da...@alltel.net> >Reply-To: KR builders and pilots <kr...@mylist.net> >To: <kr...@mylist.net> >Subject: Re: KR>Partnerships >Date: Mon, 6 Oct 2003 12:20:53 -0400 (Eastern Standard Time) > >I see some mention of Revenue regarding such partnerships. I would assume >that there would be no revenue, so why is it an issue? The only purpose >that Jerry or I would have for forming a partnership would be so that we >would be protected from that L word, as much as possible, and to see to it >that no one tried to take the plane from either of us in the event that >something real bad happened to either one of us. > >N64KR > >Daniel R. Heath - Columbia, SC > >da...@kr-builder.org > >See you in Mt. Vernon - 2004 - KR Gathering > >See our KR at http://KR-Builder.org - Click on the pic >See our EAA Chapter 242 at http://EAA242.org > >-------Original Message------- > >From: KR builders and pilots >Date: Saturday, October 04, 2003 6:56:26 AM >To: kr...@mylist.net >Subject: Re: KR>Partnerships > > >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 >._______________________________________________ >see KRnet list details at http://www.krnet.org/instructions.html _________________________________________________________________ Instant message with integrated webcam using MSN Messenger 6.0. Try it now FREE! http://msnmessenger-download.com
