Formation of a partnership is generally a tax-deferred transaction,provided the contributing partners receive partnership interests representing "control" of the entity (more than 80% of the voting power of the partnership interests).

Question

Quizplus · Accepted Answer

There is no requirement for partners making tax-deferred contributions to a partnership (either at formation or a later date)to receive control over the entity.Shareholders forming a corporation must receive shares representing "control" (essentially 80% ownership)to achieve tax-deferred status; this rule does not apply to partnerships.

Formation of a Partnership Is Generally a Tax-Deferred Transaction,provided the Contributing