Arizona Laws 29-337. Limitations on distribution; treatment as income
A. A partner may not receive a distribution from a limited partnership to the extent that, after giving effect to the distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their partnership interests, exceed the fair value of the partnership assets.
Terms Used In Arizona Laws 29-337
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Contribution: means any cash, property, services rendered, or promissory note or other binding obligation to contribute cash or property or to perform services, which a partner contributes to a limited partnership in his capacity as a partner. See Arizona Laws 29-301
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Partner: means a limited or general partner. See Arizona Laws 29-301
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Partnership agreement: means any valid agreement, written or oral, of the partners as to the affairs of a limited partnership and the conduct of its business. See Arizona Laws 29-301
- Partnership interest: means a partner's share of the profits and losses of a limited partnership and the right to receive distributions of partnership assets. See Arizona Laws 29-301
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
B. Except as otherwise provided in the partnership agreement or the trust instrument, a distribution to a partner that is a charitable remainder trust as defined in section 664(d) of the internal revenue code is income for the purposes of Title 14, Chapter 7, Article 4 to the extent that the value of the partnership interest after distribution is equal to or greater than its value at the date of contribution of the partnership interest to the charitable remainder trust. In this section, "internal revenue code" has the same meaning prescribed in section 43-105.