Businesses that generate consistent losses are an audit flag to the IRS. Under Internal Revenue Code Section 183, if an activity isn’t engaged in for profit, the deductions for the activity are generally limited to the amount of income from the activity.
Tax tips and developments relating to partnerships
The IRS has issued a revenue procedure to help taxpayers left "holding the bag" when exchange intermediaries defaulted on completing exchange transactions relating to a bankruptcy of the intermediary.
New federal partnership Form 1065, Schedule B-1 about partnership ownership is required for 2009 partnership income tax returns. In family partnerships, many partners could show up to 100% ownership because of "attribution rules".