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When the PDQ Partnership formed, it knew it had a good product, but it was a bit short on cash. After seeing the product, Jim, a CPA, said that he would set up an accounting system for the partnership in exchange for a 15% profits interest in the partnership. The partners agreed to this, as Jim was receiving only a profits interest and not a capital interest in the partnership. Jim's usual fee for this type of service would be approximately $5,000. What tax issues should Jim and the PDQ Partnership consider with respect to the payment made for the services?
Malignant Hyperthermia
A severe reaction to certain anesthesia drugs, which is life-threatening and causes a rapid increase in body temperature and severe muscle contractions.
Anesthetic Agents
Substances used to induce anesthesia, typically causing a temporary loss of sensation or awareness.
Puncture-resistant Container
A type of secure container designed to safely dispose of needles, scalpels, and other sharp medical instruments.
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