Partnership Taxation: Partnership Operation: Transactions Between Partners and Partnerships

This lesson is best used after studying § 707(a)(1) and (c) in class. Unlike many of CALI's other lessons, this lesson takes a more problem oriented approach to learning the material. The lesson provides students with additional problem sets to work through, allowing students to refine their ability to apply the Code and Regs. to a variety of situations.

Learning Outcomes

On completion of the lesson, the student will be able to:

1. Distinguish between § 707(a)(1) and § 707(c) guaranteed payments.
2. Explain the timing for the partner and the partnership for income inclusion and deduction or capitalization of a § 707(a)(1) payment and of a § 707(c) payment.
3. Distinguish between a § 707(c) guaranteed payment and a § 704 distributive share allocation followed by a distribution.