Bob and Joe are considering the formation of a partnership to operate an adventure travel business. Both Bob and Joe have are former military Special Forces officers, and have extensive outdoors survival training. Their vision is to create a "vacation" business for those travelers who wish to learn these types of survival skills. Trips will be customized to the desires of each group and can include: hunting, rappelling, rock-climbing, emergency first aid training and other basic skills. They have come to you, a CPA, for advice on what type of partnership they should form and what other issues they should address in their partnership agreement. Both have $50,000 cash to invest, as well as some equipment. Bob has a Hummer worth $75,000, and Joe has 2 ATVs, plus camping, orienteering and hunting equipment worth $30,000.

As you consider their circumstances, discuss the following questions in your initial post:

• What type of partnership would be most appropriate and why?
• How should they allocate profits and losses?
• Should they record salary and bonus allowances?
• What other issues do you feel are relevant and important for them to consider?