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Thanks for that input. The lawyer did indicate that it would be necessary/desirable to ensure that at least enough was paid out to the limited partners to cover any extra taxes, and to be sure they were comfortable with any extra administration that might ensue. Certainly no one wants cause any familial hardship, especially with a vehicle that should be a benefit to the whole family, so your warning is food for thought, and a good reminder to make sure everyone communicates and has their concerns addressed.

I hadn't really thought of it as a means to lower the general partner's taxes. Is it lower because fewer of the assets are credited to the general partner? Did you/are you and your family using this as a vehicle to make gifts to the limited partners? What sort of discount rate does the partnership use? Are there any extras associated with the partnership such as a dummy grantor trust?

Thanks, again.
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