Question

At the end of the current year, kari will receive a one-third capital interest only in exchange for services rendered. kari’s interest will not be subject to a substantial risk of forfeiture, and the costs for the type of services she provided are typically not capitalized by the partnership. for the current year, the income and expenses from operations are equal. consequently, the only tax consequences for the year are those relating to the admission of kari to the partnership.

Answer 1

A partnership is a type of business entity where two or more individuals come together to carry on a trade or business for profit. Partnerships have advantages such as little government regulation and the ability to raise more capital, but they also have disadvantages such as partners being responsible for each other's acts and the limited life of the partnership.

Step-by-step explanation:

Partnership is the subject of this question. A partnership is a type of business entity where two or more individuals come together to carry on a trade or business for profit.

In this scenario, Kari is being admitted as a partner and will receive a one-third capital interest in exchange for services rendered.

Partnerships have several advantages, such as being subject to little government regulation, being able to raise more capital than a sole proprietorship, and partners paying taxes on their share of the income.

However, there are also disadvantages, including partners being responsible for each other's acts and the limited life of the partnership.