Question

Respond to the following in a minimum of 175 words:

• Discuss how the IRS assesses and collects taxes from a partnership and owners with 20 partners.
• Do the individual partners in a partnership have a responsibility to pay part of the firms taxes? If so, how much?
• What conditions would cause an owner to pay more or less taxes compared to their partner?

Answer 1

PARTNERS MUST PAY INCOME TAXES ON THEIR SHARES OF PARTNERSHIP INCOMES THEY TYPICALLY REQUIRE SOME DISTRIBUTION OF CASH FROM THE PARTNERSHIP IN ORDER TO PAY THEIR TAXES. IF A PARTNER ELECTS TO INSTEAD LEAVE SOME PORTION OF HIS OR HER SHARE OF A DISTRIBUTION IN THE PARTNERSHIP, THIS IS CONSIDERED AN INCREMENTAL INCREASE IN THE CAPITAL CONTRIBUTION IF THAT PERSON TO THE BUSINESS..IN THOSE INSTANCES WHERE AP PARTNERSHIP RECOGNISES LOSS DURING A FISCal year, the shaare of the loss recognised by each partner in his personal tax return is limited to the amount of loss that offt sets each partners basis in the partnership. if the loss is greater than this basis, the excess amt, must carried forward to next year. in essence , tax law does not allow a partner to recognise more on his oe her rax return than the amount contributed into apartnership.....