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This course is the first in a 2-part series that covers tax issues that can affect investment partnerships and their partners. Investment partnerships have become increasingly prevalent. They are now widely used for real estate development and management, private equity, hedge, venture capital and credit fund vehicles, and wealth management arrangements.The partnership structure (including LLCs treated as partnerships for tax purposes) offers the advantages of flow-through taxation and economic flexibility, but with those benefits come complexity and sometimes unanticipated tax results.

The 2-part series broadly explores a myriad of issues that affect investment partnerships and their partners. This course (the first part of the series) starts out by identifying different types of investment vehicles and their uses. It then explores tax issues that can affect investment partnerships and their partners. It describes considerations concerning the partnership structure (as compared with C and S corporations), common structures for investment funds, formation of investment partnerships (including contribution of property and services to those partnerships, and the “disguised sale” and “disguised service” rules). It then focuses on approaches concerning tax allocations and distributions, including rules concerning contributions of appreciated or depreciated property.

While accountants and other tax professionals will find the technical aspects of this course helpful in understanding investment partnerships, practical aspects of the course will also be valuable to investment and real estate professionals, finance and accounting executives, wealth managers, and investors (and those considering becoming investors) in investment partnerships. 

Part II of this course can be found here.

Course Key Concept: Partnership, Limited Liability Company, Partnership Agreement, Operating Agreement, Disguised Sale, Mixing Bowl Transaction, Outside Basis, Inside Basis, Allocation, Special Allocation, Capital Account, Substantial Economic Effect, Ceiling Rule

Learning Objectives

  • Identify different forms of investment vehicles and discover advantages and disadvantages of the more prevalent forms.
  • Recognize the key parties to investment structures and their respective tax objectives.
  • Identify tax issues concerning investment partnerships.
  • Explore issues that arise in establishing and making contributions to investment partnerships.
  • Discover issues and potential distortions that can arise concerning partnership allocations and distributions.
Last updated/reviewed: April 27, 2020

Prerequisites

Course Complexity: Foundational

No advanced preparation or prerequisites are required for this course

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  1:46Course and Instructor Overview
  16:38Introduction to Investment Partnerships: The Basics - Part 1
  14:10Comparison - Partnerships Vs. Other Vehicles
  14:32Establishing Investment Partnerships
  9:34Establishing Investment Partnerships Cont'd
  17:35Allocations and Distributions (a)
  12:10Allocations and Distributions (b)
  15:02Allocations and Distributions (c)
Continuous Play
  1:41:27Investment Partnerships: The Basics - Part I
Supporting Materials
  PDFSlides: Investment Partnerships: The Basics - Part I
  PDFInvestment Partnerships: The Basics - Part I Glossary/Index
Review And Test
  quizREVIEW QUESTIONS
 examFINAL EXAM