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> Information provided on this site is for general guidance only and is often simplified. Actual IRS procedures are complex, and taxpayers should obtain professional assistance or use IRS sources for complete information.


Summary Of Corporate Forms A summary of the tax characteristics of different corporate forms.

Domestic International Sales Corporation The DISC was used in conjunction with Foreign Sales Corporations, but has been reborn following 2003 legislation.

Limited Partnership Limited Partnerships are often used for investment-holding purposes, and have 'pass-through' status for domestic partners.

Limited Liability Company LLCs are treated as partnerships unless they opt to be treated as corporations.
"S" Corporation "S" Corporations have a 'pass-through' tax treatment.


Limited Partnership

In a Limited Partnership, one or more ‘general' partners manage the business while 'limited' partners contribute capital and share in the profits but take no part in running the business. General partners remain personally liable for partnership debts while limited partners incur no liability with respect to partnership obligations beyond their capital contributions.

The Limited Partnership has been very widely used for investment purposes. In the last 30 years, most major financial companies have used the LP form to channel private capital into real estate, oil and gas and mezzanine financing. These LPs are normally structured to be long-term investments (typically 10 to 15 years with extension rights at the partnership's option) and do not make any liquidity provision to cover the eventuality that the investor decides to sell their partnership interest prior to the termination of the LP.

Normally, death, disability, or withdrawal of a general partner dissolves the partnership unless the partnership agreement provides otherwise or all partners agree, in writing, to substitute a general partner. Death or incompetence of a Limited Partner has no effect on the partnership.

The Family Limited Partnership (FLP), which is simply a Limited Partnership used by one family, has become the leading form for asset protection and estate planning in the US. But there are some legal dangers in many states, where a creditor is permitted to “foreclose” on a partnership or LLC interest. A 'foreclosure' is a seizure of the debtor’s interest and that is a very powerful weapon for the plaintiff. Thus, an asset protection structure using an FLP must also protect ownership interests with a trust.

In May, 2005, the US Treasury and the Internal Revenue Service finalized regulations on the tax withholding obligations of US partnerships that include foreign partners.

Foreign individuals were subject to US tax for income from doing business in the US, in addition to income earned in the US through a partnership. To ensure the tax gets collected the IRS requires that partnerships withhold tax on behalf of the foreign partner.

The final rules, first proposed in September 2003, provided guidance on how to determine a foreign partner's share of partnership income and to calculate withholding tax and payment dates. The matters of interest, penalties and extra taxes for failure to comply with the regulations were also addressed.

In addition, the Treasury also issued related proposed and temporary rules covering certain tax and non-tax attributes of a foreign partner for purposes of determining tax withholding obligations.

Summary Of Corporate Forms A summary of the tax characteristics of different corporate forms.

Domestic International Sales Corporation The DISC was used in conjunction with Foreign Sales Corporations, but has been reborn following 2003 legislation.

Limited Partnership Limited Partnerships are often used for investment-holding purposes, and have 'pass-through' status for domestic partners.

Limited Liability Company LLCs are treated as partnerships unless they opt to be treated as corporations.
"S" Corporation "S" Corporations have a 'pass-through' tax treatment.

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New On The Network Today

This feed is published daily with selected new or updated content from across our network. For a list of network sites, many of which feature daily news, see below.

 
02/09 New Lowtax Editor Column, by Kitty Miv
01/09 International Privacy and Security, Investors Offshore special feature
31/08 Lowtax Belize, annual update
27/08 IRS To Drop UBS Lawsuit, Tax-News.com
26/08 New Lowtax Editor Column, by Kitty Miv
25/08 New PBTG Editor Column, Caroline, PBTG editor
24/08 Uruguay Stays On OECD Grey List, Tax-News.com
23/08 Don't Forget Doha, And I Don't Mean The Tennis, Jeremy Hetherington-Gore blog entry
20/08 Ireland Plans Social Security Overhaul, Tax-News.com
19/08 New Lowtax Editor Column, by Kitty Miv
18/08 New PBTG Editor Column, Caroline, PBTG editor
17/06 Lowtax Cayman Islands, annual update
16/08 Germany's Fiscal Court Seeks Property Tax Reform, Tax-News.com
13/08 Jurisdiction Special Focus: Antigua and Barbuda, Investors Offshore special feature
12/08 New Lowtax Editor Column, by Kitty Miv
11/08 New PBTG Editor Column, Caroline, PBTG editor
10/08 Brazil Cuts Import Tariffs, Tax-News.com
09/08 Ukraine Tax Code Published, Tax-News.com
06/08 France Plans Reform Of Property Tax Credit, Tax-News.com
04/08 New PBTG Editor Column, Caroline, PBTG editor
02/08 Islamic Finance - The New Mainstream Alternative, Investors Offshore special feature
28/07 New PBTG Editor Column, Caroline, PBTG editor
27/07 UK Launches Raft Of Tax Consultations, Tax-News.com
26/07 Fat Tax On The Menu , Jeremy Hetherington-Gore blog entry
23/07 Sarkozy Seeks 'Fiscal Convergence' With Germany, Tax-News.com
20/07 Singapore Base For Tuvalu OIFC, Tax-News.com
15/07 St Vincent & The Grenadines, Investors Offshore special feature
13/07 Tax- News.com Jersey Review 2010-2011
12/07 Goodbye To All That, Jeremy Hetherington-Gore blog entry
06/07 Hong Kong Full PBTG Guide, added to Personal Business Tax Guide
28/06 Lowtax Dubai, annual update
18/06 Singapore - Another Hong Kong?, Investors Offshore special feature
15/06 Swiss Parliament Approves UBS Agreement, Tax-News.com
08/06 Dubai Full PBTG Guide, added to Personal Business Tax Guide
04/06 Lowtax Panama, annual update
01/06 Lowtax Luxembourg, annual update
03/03 Personal Business Tax Guide, PBTG, has launched!
Providing essential tax news and information for globally mobile artists, contractors, entrepreneurs, professionals, small businesses, sportspersons and entertainers.
 

 
Lowtax Network Sites
Lowtax Network Portal: 'Low-tax' business and investment in the top 50 jurisdictions covered in exceptional detail.
Tax News: Global tax news, continuously updated through the day.
Investors Offshore: The independent offshore and alternative investment guide for expatriates and the globally aware investor. Sponsored by HSBC Bank International.
Law & Tax News: Daily news and background data on tax and legal developments for international business.
Offshore-e-com: A topical guide to offshore e-commerce focused on tax and regulation.
Lowtax Library: One of the web's largest and most authoritative business and investment information sources.
US Tax Network: The resource for free online US taxation information, covering: corporate tax, individual tax, international tax, expatriates, sales and e-commerce tax, investment tax.
NEW! Personal Business Tax Guide: Providing essential tax news and information on business for contractors, entrepreneurs, professionals, small businesses, artists, sportspersons and entertainers.
 

IMPORTANT NOTICE: THE LOWTAX NETWORK has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments. All materials on this site copyright The Lowtax Network 1999 - 2010.


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