What is a "partnership" and what are its tax implications?

What is a "partnership" and what are its tax implications?

Gregg Wind (Partner, Wind Bermer Hockenberg, LLP) gives expert video advice on: Can starting a business decrease my taxes? and more...

A partnership is what we call a pass-through entity. That means that the income from the partnership walks over and is taxed on the partner's individual tax returns, or corporate tax returns, because we can have corporate partners as well. A partnership can be a limited partnership or a general partnership. With a general partnership, the partners have pretty much unlimited liability. With a limited partnership, there is usually one or more general partners and the rest limited partners. And limited partners are generally only liable up to the extent of their investment in the partnership.