Liquidating distribution partnership

13-Oct-2016 06:43

Through proper drafting, the grantor will not be deemed to be the owner of the trust property for estate tax purposes.

However, the grantor must pay the tax on the S corporation income flowing to the trust.

The legal definition of a partnership is generally stated as "an association of two or more persons to carry on as co-owners a business for profit" (Revised Uniform Partnership Act § 101 [1994]).

Early English mercantile courts recognized a business form known as the societas.

The money or assets the partner withdraws is recorded in the company's accounting record in what is referred to as a drawing or draw account.

Usually, each partner has a separate drawing account to facilitate accurate record keeping.

This type of business often proves more complicated than a sole proprietorship because each partner makes an investment in the business, though not always in monetary form, and has a right to a portion of its profits.

Some partners rarely take draws while others draw large amounts of money and assets.