This video provides an overview of how partnerships are taxed in the United States. It discusses:
What a partnership is, how it is formed, and what tax return it must file
Advantages of partnerships: why people would choose a partnership instead of an S corporation or a C corporation
The different types of partnerships, as well as the difference between general and limited partners
The importance of the partnership agreement
The difference between a partner's capital interest and their profits interest
How a partnership's income flows through to the partners and is taxed at the partner level, with distinction made for separately stated items like capital gains
The two types of guaranteed payments, and how they are taxed
Outside basis, inside basis, and Section 704(b) capital accounts

0:00 Introduction
0:29 What is a partnership?
3:16 Why use a partnership?
6:23 Types of partnerships
8:34 The partnership agreement
9:45 Capital interest vs. profits interest
11:22 Partnership income/losses
13:12 Guaranteed payments
15:48 Outside basis
17:15 Inside basis
17:53 Section 721
18:49 Why outside basis and inside basis might differ
19:38 Special allocations and 704(b) capital accounts
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