What does partnership liabilities mean on the CPA exam?
Partnership liabilities. Debt of the partnership, allocated among the partners and added to their outside basis. A change in the allocation is treated as a cash contribution or distribution.
Defined against Sec. 752.
Which CPA exam sections use partnership liabilities?
Partnership liabilities appears in the REG section of the CPA exam.
Related terms
- outside basis: A partner's tax basis in the partnership interest itself.
- total liabilities: Everything the entity owes, added up.
- limited partnership: A partnership with at least one general partner who manages and is personally liable, and limited partners who invest without personal liability or control.
- guaranteed payment: A payment to a partner for services or the use of capital, determined without regard to partnership income.
- hot assets: A partnership's unrealized receivables and inventory.
- partnership interest: A partner's stake in the partnership itself, distinct from any interest in its underlying assets.