You can retain a priority return from a family partnership while transferring its future upside. But the preferred return has to be supportable, and the…

You can retain a priority return from a family partnership while transferring its future upside. But the preferred return has to be supportable, and the common interest receives what is left, not a guaranteed return.

The rate, cash flow and actual partnership terms determine whether the freeze works.

This Daily Tax Planning Strategy explains how a preferred partnership freeze divides current returns and future growth.