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FAQ / Question: What is the maximum percentage interest in the partnership that Partnership P should report on its 2008 Form 1065, Schedule B question 3b for individual partners A, B, and C under the follow


Partnership P determines at the end of tax year 2008 that for 2008:
Partner A owns a 60 percent interest in profits, a 20 percent interest in loss, and a 50 percent interest in capital.
Partner B owns a 20 percent interest in profits, a 60 percent interest in loss, and a 30 percent interest in capital.
Partner C owns a 20 percent interest in profits, a 20 percent interest in loss, and a 20 percent interest in capital.
Partner C is the sister of partner A.

A3: For 2008, the maximum percentage directly owned by partner A is 60 percent (the maximum of 60, 20, and 50), the maximum percentage directly owned by partner B is 60 percent (the maximum of 20, 60, and 30), and the maximum percentage owned direct by partner C is 20 percent (the maximum of 20, 20, and 20).

In answering question 3b, partnership P reports for 2008 that partners A and C each own, directly or indirectly, 80 percent of the partnership’s profit, loss, or capital.
Partner A owns, directly, 60 percent and owns, indirectly, by family attribution, 20 percent of the profit, loss, or capital of the partnership.
Partner C owns, directly, 20 percent and owns, indirectly, by family attribution, 60 percent of the profit, loss, or capital of the partnership.

Partnership P reports for 2008 that partner B own, directly or indirectly, 60 percent of the partnership in response to question 3a.
Partner B owns, directly, 60% of the profit, loss, or capital of partnership P.

 




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