Professional Documents
Culture Documents
Partnership Report
Partnership Report
Partnership Report
PARTNERSHIP
Two or more partnership may also form a partnership for the exercise of
a profession
CLASSIFICATION OF PARTNERSHIPS
Based on Taxation
a. General professional partnership
b. General co-partnership.
General partner is one whose liabilities or obligations are not limited only
to his/her capital contributions. Creditors have the right to go after the
personal properties of the general partner in the event of the partnerships
bankruptcy.
Based on Taxation
GENERAL PROFESSIONAL
PARTNERSHIP
GPP is not a taxable entity since it acts only as a pass through entity
where its income is finally taxed to the partners comprising it.
The net income of GPP, for purposes of computing the distributive share
of the partners, shall be computed in the same manner as a corporation.
If the GPP uses the itemized deductions, the partners may still claim
itemized deductions from the partnerships share. However, they are
precluded from claiming the same expenses already claimed by the GPP.
If the GPP avails of itemized deductions, the partners are not allowed to
claim the OSD form their share in the net income of the GPP. This means
that the OSD is in lieu of the items of deductions claimed both by GPP
and the partners.
If the GPP avails the OSD in computing its net income, the partners can
no longer claim further deductions from their share in the net income of
the GPP
If the GPP opts for the OSD, a partner may also use the OSD on other
gross income from trade, business or exercise of profession, but not to
include his/her share from the net income of the GPP.
GENERAL CO-PARTNERSHIP
Prob 1
TABAG
MACARIOLA
GARCIA
Gross Income
5M
3.5M
2M
2.8M
Expenses
3.7M
1.2M
600k
825K
500k
200k
200k
Income subject
To final taxes
(Net)
200k