Rex and Scott operate a law practice in partnership form. Because Rex and Scott are brothers, the partnership is subject to the family partnership income reallocation rules.

Question

Quizplus · Accepted Answer

The family partnership income reallocation rules do not apply simply because the partners are family members; they apply based on the contribution of capital or services. A partnership between family members is treated like any other partnership for tax purposes, based on the contributions of the partners and the operation of the business.

Rex and Scott Operate a Law Practice in Partnership Form