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What Is the Difference Between the Aggregate and Entity Theory

question 5

Essay

What is the difference between the aggregate and entity theory of partnership taxation? Provide two examples of how partnership tax rules reflect the aggregate theory and two examples of how they reflect the entity theory.


Definitions:

Creditor

An entity (person or institution) to which money is owed.

Discounted Note

A financial instrument that is sold for less than its face value and matures at face value, resulting in a gain for the holder upon maturity.

Interest-Bearing Note

A debt instrument that requires the issuer to pay a specified interest rate to the holder until the note is repaid.

Installment Note

A financial instrument that details a loan to be repaid with interest in periodic payments over a set period.

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