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Consider the following scenario and answer the accompanying questions: LP is a limited partner and GP is a general partner of the LG partnership. LP
Consider the following scenario and answer the accompanying questions:
LP is a limited partner and GP is a general partner of the LG partnership. LP contributes $ and GP contributes $ to the partnership, which then gets a $ nonrecourse loan and purchases a building for $ GP is required to make up any capital account deficit, but LP is not. However, the partnership agreement has a qualified income offset provision for LP and also a minimum gain chargeback provision. The partnership allocates of all partnership items to LP and to GP until the partnership generates minimum gain. At that point, they will be allocated
Is this allocation reasonably consistent with the allocation of items that do have substantial economic effect?
What would your answer be if after the partnership generates minimum gain, items of income and loss are allocated to LP and to GP
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