Two partners can own a property equally, receive the same cash and report different amounts of taxable income.

Two partners can own a property equally, receive the same cash and report different amounts of taxable income.

When one contributes appreciated property and the other contributes cash, the section 704(c) method belongs in the negotiation. Compare the allocations during ownership and at sale before signing the agreement.

This Daily Tax Planning Strategy looks at how that choice changes each partner's tax timing.

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