Question

What is the definition of capital interest in a partnership?

1) The partner's right to the net assets of the partnership at liquidation
2) The partner's right to the share of future income or losses of the partnership
3) The bundle of economic rights a partner receives for his investment in a partnership

Answer 1

Capital interest in a partnership refers to the bundle of economic rights a partner receives for their investment in the partnership, such as the right to a share of the profits, losses, and assets.

Step-by-step explanation:

The definition of capital interest in a partnership is 3) The bundle of economic rights a partner receives for his investment in a partnership. Capital interest refers to the partner's contribution of assets, usually in the form of money, property, or services, to the partnership. This contribution gives the partner the right to a share of the partnership's profits, losses, and assets.