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Bain & Company I’m from Italy and will start my master’s degree at Oxbridge this fall. I got my undergrad from a target uni in continental Europe. I want to start my career in consulting, possibly MBB, in London. I know consulting firms tend to hire locally but I’d really like to work in London and that’s also one of the main reasons why I went for the Oxbridge degree. Anyone, who might have some tips, or went through a similar experience? McKinsey & Company Boston Consulting Group Bain & Company
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704c is generally the difference between 704b and tax capital. All is different from basis, which technically includes the debt.
704b is the economic interest /real world interest in the partnership. Difference from tax capital is built in gain/loss on contributed property, or from "book ups" on a given event.
Tax capital on the k-1 is the members share of the inside tax basis
704c is the amount of built in gain or loss.
In a simple example, 2 partners form a 50/50 partnership - one contributes $100k cash, the other contributes land with a basis of $75k and FMV of $100k. Each members economic interest on day one is $100k - their starting 704(b) capital. The cash member has tax capital of $100k. The land member has tax capital of $75k, and then a 704(c) built in gain or $25k.
Tax god
Subject Expert
Simple, no
704(b) = Tax + 704(c)
704c follows unrealized. So this is the allocation you would use for hedge fund reveal.
704b is following economic allocations, meaning you would follow allocations to how book did it, aka just follow the Pcap allocations.
Tax basis is calculating the tax basis of the partner or investment ( beginning tax basis, contribution, distribution, taxable income, 18a/18c
Coach
Educational Example: You put in $5m cash into a PS and I put in a building worth $5m but with zero tax basis. We are 50-50 equal partners.
Our 704b economic business deal capital accounts are each $5m so we can each be allocated $5m of future losses. You can deduct yours but I cannot deduct mine as I don’t have any 704d outside basis.
Remedial method under 704c let’s us pretend you are buying an interest in the building from me over time. You get allocated fictional deductions and I get allocated fictional income. This is elective and what’s good for you is bad for me so it’s a negotiation.
The purpose of 704c in this example is to try to equalize my 704b capital account ($5m) and my 704d tax basis ($0). So allocating fictional income to me increases my 704d tax basis.
If the PS sells the building 704c requires that any tax gain gets allocated to me up to my built in gain at contribution ($5m excess of fmv over tax basis).
Hope this helps. Good luck.
Coach
Nothing simple about it.
Coach
Google it, I found some helpful examples online but I had to read multiple articles on it.
The b in 704(b) stands for book. The c in 704(c) stands for capital. Then I gave her that 704(d) and now we have a partnership
I thought cohnreznick was a national firm…..
Logic of Subchapter K is your best bet.
Inside and outside basis
Partner (owners) basis vs partnership (business) basis