This week you will be completing a two-part discussion board
This week you will be completing a two-part discussion board prompt for your response.Part 1:Although partnerships are flow-through entities, partner-partnership, partner-partner, and partner-external party transactions may have tax implications. Discuss the tax implications of each type of transaction. Focus on how gains may be triggered in each transaction type.Part 2:One of the most difficult part of preparing a partnership tax return is the allocation of income the partners. If there is a partnership agreement in place, it is used to allocate income. The tax preparer must follow the partnership agreement to prepare each partner’s Schedule K-1. Review the attached Partnership Agreement and discuss the following:What is the purpose of Schedule K-1 for partnerships and S-Corporations?Discuss potential difficulties in allocating income using the basic partnership agreement attached above.