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A partner can acquire an interest in partnership capital or profits as compensation for services performed or to be performed.
The profits interest relates to a substantially certain and predictable stream of income from partnership assets, such as income from high-quality debt securities or a high-quality net lease.
Within 2 years of receipt, the partner disposes of the profits interest.
The profits interest is a limited partnership interest in a publicly traded partnership.
The basis of a partnership interest is the money plus the adjusted basis of any property the partner contributed. If the partner must recognize gain as a result of the contribution, this gain is included in the basis of his or her interest. Any increase in a partner's individual liabilities because of an assumption of partnership liabilities is considered a contribution of money to the partnership by the partner.
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