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Essay Available:
Pages:
1 page/β‰ˆ275 words
Sources:
1 Source
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Coursework
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 6.32
Topic:

Family Partnership and Proprietorship

Coursework Instructions:

A general partner in a partnership has unlimited legal liability but also has managerial control over the partnership. A limited partner has limited liability but does not exercise control over the day-to-day operations. John, your client, owns a machine shop operated as a sole proprietorship. The business is worth $10,000,000. He would like to transfer a portion of ownership to his two adult children, Cindy and Luke, by converting the business into a partnership. How would you structure a partial transfer of ownership in the business to Cindy and Luke to achieve a fair market value of the transfer that is less than Cindy and Luke's proportionate share of the $10,000,000 value? Are there any penalty concerns associated with the valuation discounts that your proposed transfer takes advantage of, especially if the valuation is found to be inaccurate?
Cite appropriate statutory authority, case law, and/or the AICPA Code of Professional Conduct, American College of Trust and Estate Counsel (ACTEC), and/or ABA Model Rules of Professional Conduct to support your initial post

Coursework Sample Content Preview:

FAMILY PARTNERSHIP
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This case is an example that applies to a limited company as well as that of a sole proprietorship. A sole proprietor or a majority shareholder has got the legal ability to transfer their shares and therefore the assets of the enterprise to another business. This is however, subject to all the legal requirements and expectations. Any process that will go beyond the boundaries of the law will therefore be deemed illegal, null and void. Luckily in this case, there is no external influence for John, since he is working only with his family. Transfer of partial ownership is usually a factor that is critically considered when it comes to matters such as inheritance.
For there to be partial transfer, there is need for proper valuation of the most essential asset...
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