The limited partnership

Various, and often contradictory, governmental actions in the 1980s, together with dynamic and, in many instances, unforeseen economic developments, created an economic environment in which thousands of investors saw their equities in limited partnerships either disappear or grow significantly smaller. As an example, during the fouryear time period 19851988, the real estate partnerships operated by a single general partner firmI.R.E. Real Estatelost $70 million.1 For the economy as a whole, the losses are measured in the billions.2

This research examines the concept of the limited partnership investment vehicle. The purpose of this examination is to assess the acceptability of the limited partnership concept as

1J. Aquino, "Real Estate Funds Lost $70 Million in Four Years," Miami Review, 12 July 1989, 1.

2L. R. Walbert, "At Their Mercy," Financial World, 23 January 1990, 6769.

1 2an investment vehicle for the decade of the 1990s, and to define the criteria which must be met, if the concept is to be acceptable.

A free market economy such as that found in the United States is highly dependent on the private

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ted changes in federal income tax law which have had profound effects on tax shelters of all types, and on limited partnerships, whether or not their primary purpose was the sheltering of ordinary income from federal income tax. This effect was somewhat ironic, because the Economic Recovery Act of 1981, also proposed by the Reagan Administration provided a major boost for limited partnership investment.24 The TRA86 became law in the summer of that year. Many of the provisions, however, were phasedin over a period of __________ 24Haight, 26. 8 9time. Parts of the TRA86 became effective in 1987, and that year is recognized as a transition year. Most of the provisions became effective in 1988, and a few became effective even later. Tax Rates, Allowances, and Deductions The TRA86 changed taxation rates, bases of taxation, and other significant factors related to federal income taxation for individuals, partnerships, corporations, trusts, and other entities subject to federal income taxation. The prior federal income tax law permitted the taxation of marginal income for individuals at a top rate of 50 percent, and for corporations at a top rate of 46 percent. The TRA86, when its provisions become fully effective,
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Some common words found in the essay are:
Journal Accountancy, United Congress, Deductions TRA86, Financial World, Reform Act, AMT AMT, Simon Schuster, IRS Prior, Stanger Register, Inc December, tax shelters, income tax, tax shelter, limited partnerships, federal income, abusive tax, federal income tax, limited partnership, real estate, tax law, income tax law, tax benefits, abusive tax shelters, abusive tax shelter, limited partnerships chapter,
Approximate Word count = 3703
Approximate Pages = 15 (250 words per page)

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