PARTNERSHIPS

Mark Rutecki & Associates most often advises use of a limited or general partnership in connection with the purchase of real estate. As a purchaser you should be concerned about avoiding personal liability that can arise out of the ownership of real estate. The risk of a personal injury to someone on your property, whether residential or commercial, whether for business or private use, is always a possibility under Florida law. Insurance can only provide a limited degree of protection. There have been cases where the assets of an individual have been suddenly and completely lost as a result of a personal injury to someone on the premises. Holding the property through a limited partnership shields an individual from catastrophic losses as a result of personal injury lawsuits. The decision to hold real estate through a limited partnership is particularly advisable when the property is a secondary residence, a rental property, property for commercial lease, or is used for any purpose other than as your primary residence.
Holding property in a limited partnership simultaneously provides the added benefit of an effective means of estate planning. The donors (usually the parents) can transfer assets to the partnership and then give a percentage of ownership interests in the partnership to their children. The parents thereby reduce the size of their estate taxes while maintaining its benefits. The partnership also helps to lower income taxes by spreading the income amongst different family members. As the general partners, the parents effectively retain complete management control over the assets in the limited partnership and the benefits of owning the asset.
The decision to use a partnership as opposed to a form of corporation to hold real estate is frequently based upon avoiding potential disastrous tax liabilities. One often overlooks the tax effects of removal of assets from the corporation or of division of the properties in the corporation.
Mark Rutecki & Associates' legal services in the formation of partnerships includes drafting and preparation of all documents required by the Secretary of the State of Florida, meeting all filing requirements, engaging the client with a local accounting firm for tax preparation, and continued consultation throughout the duration of the partnership.

return to index

Please contact Orlando office at (407)-566-9503
e-mail: Mark Rutecki & Associates