Hi all..
An attorney for a client is forming a LP structure for one of his real estate development projects. The attorney suggests to form a LP with one general partner (LLC) with zero ownership interest. The State laws allow for a GP to own no ownership interests, but what about from the taxation point of view. How does the IRS take it..
I believe I had read somewhere in the past that the IRS has a safe harbor for general partners to own at least 1% in the ownership and economic interests otherwise the IRS would treat the LP as an association taxable as a corporation.. Cant find the code for reference.
Any one of you can shed some light on it..
Thank you