Bud Has Devoted His Life to His Business, the BK

question 63

Essay

Bud has devoted his life to his business, the BK Partnership, in which he owns an 85% capital and profits interest. Because he has worked so hard all his life, he never married and has no children. He has decided to give a 25% capital and profits interest to Berry, a close friend, if Berry will work in the business for five years. Berry will receive guaranteed payments for his work. Bud devotes all his time to the partnership, but he takes no salary. What tax issues should Bud and Berry consider with respect to the gift of the partnership interest and Bud's employment arrangement with the partnership?

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Definitions:

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a primary reference for diagnosing mental disorders.

Kaplan

Likely refers to a person or concept in a specific context, but without additional information, it's unclear. Often associated with figures in education or healthcare.

Tissot

Refers to Samuel-Auguste Tissot, an 18th-century Swiss physician known for his work in the field of neurology and the concept of medical ethics.

Masturbation

The sexual stimulation of one's own genitals for sexual pleasure, often to the point of orgasm.