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| Terms of the Partnership Table Of Contents Formation of the Partnership Name Definitions Business of the Partnership Names and Addresses of the Partners Term Business Office Capital Contributions Distributions Allocations of Profits and Losses for Tax Purposes Book of Accounts, Records, and Reports Fiscal Year Partnership Funds Transfer of Partnership Interests and Voting Management and Administration of Business Dissolution of the Partnership Winding Up, Termination, and Liquidating Distributions Notices Miscellaneous |
Allocation of Profits and Losses for Tax
Purposes Mojo Racing Partners will annually file Form 1065 with the IRS, and realize all gains and losses for the current fiscal year. The Partnership will not "defer" losses. The Taxable Income and Tax Losses shall be allocated among the Partners in accordance with their respective Partnership Percentages. Because Mojo Racing Partners is a General Partnership, income and loss is taxed at the individual Partner's level. As such, each Partner will be issued a Schedule K (a.k.a. "K-1") of Form 1065 to file with his/her personal tax return. The K-1 will list the Partner's share of the income, loss, deduction, and credits for the Partnership. This method of taxation is more commonly referred to as a "pass-through" entity because the income, loss, etc. is passed on to the individual Partners respectively based on their percentage of ownership. As such, each Partner is required to submit his/her Social Security Number or personal Tax ID. In addition to the K-1, each Partner should maintain his/her own individual tax records (income, expenses, deductions, etc.) as they pertain to the business of owning a Thoroughbred. |
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