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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?
Justice Department
A government department responsible for the enforcement of the law and administration of justice, primarily at a federal level.
American Hospital Supply
A company that historically specialized in supplying products and services to hospitals and healthcare facilities.
Economic Influence
The impact that economic factors or policies have on the market, consumer behavior, and investment values.
Streamline Order
A process designed to simplify order management, reducing steps and time needed to process orders efficiently.
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