Louisiana Revised Statutes 47:220 – Treatment of certain liabilities
Terms Used In Louisiana Revised Statutes 47:220
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- 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.
A. Increase in partner’s liabilities. Any increase in a partner’s share of the liabilities of a partnership, or any increase in a partner’s individual liabilities by reason of the assumption by such partner of partnership liabilities, shall be considered as a contribution of money by such partner to the partnership.
B. Decrease in partner’s liabilities. Any decrease in a partner’s share of the liabilities of a partnership, or any decrease in a partner’s individual liabilities by reason of the assumption by the partnership of such individual liabilities, shall be considered as a distribution of money to the partner by the partnership.
C. Liability to which property is subject. For purposes of this Section, liability to which property is subject shall, to the extent of the fair market value of such property, be considered as a liability of the owner of the property.
D. Sale or exchange of an interest. In the case of a sale or exchange of an interest in a partnership, liabilities shall be treated in the same manner as liabilities in connection with the sale or exchange of property not associated with partnerships.
Added by Acts 1958, No. 441, §2.