New Investor's Guide to Limited Partnerships

What Limited Partnerships Are and Why They Matter to Your Investments

As a new investor, you may not realize the difference between investing in limited partnerships compared to buying shares of stock. The tax consequences, as well as advantages and drawbacks, are significant. From buying limited partnership units through a stock exchange and your brokerage account to forming one so you can invest with family and friends by pooling money, this basic overview of limited partnerships was designed to help answer your most pressing questions and point you in the right direction to learn more when you meet with a qualified adviser.

Using a Family Limited Partnership to Pool Your Investments

Family Limited Partnerships

Family members often want to invest together by pooling their money in order to take advantage of investment opportunities that would not be suitable for small account sizes.  One of the most popular ways to achieve this is to form a family limited partnership.  This special type of investing vehicle provides tax advantages and a host of other benefits.  Let this introductory overview give you a basic understanding of what a family limited partnership is and how it may benefit your family. More

How a Family Limited Partnership Can Lower Gift Taxes and Estate Taxes

Limited Partnership Estate Taxes and Gift Taxes

A great technique for lowering estate taxes and gift taxes is to form a limited partnership, consolidate your assets within it, and then give part of the partnership away to your heirs each year.  Unsurprisingly, this particular strategy is frequently used by successful and wealthy families.  In this in-depth article, I'll help you understand how this fantastic strategy can work for you and your family. More

How to Form a Limited Partnership

Form a Limited Partnership

Starting a limited partnership is much easier than you may think!  With the right attorney or accountant and a few hundred or thousand dollars, you may be able to form you LP in an hour or two.  For those of you contemplating forming your own limited partnership, I'll explain two of the most popular ways to form an LP in the United States.  Still unsure if forming a limited partnership is right for you?  Take a look at the article below for more information. More

Top 6 Reasons to Form a Limited Partnership

Top Reasons to Form a Limited Partnership

If you've read through the articles previously mentioned, by now you should have a basic understanding of what a limited partnership is and what it does.  To expand upon what you've learned, I've compiled a list of six major benefits of forming a limited partnership.  By understanding what they are, you can better take advantage of this excellent investment structure. More

Limited Liability Limited Partnerships - A New Type of Investment Vehicle

Limited Liability Limited Partnerships

One of the biggest drawbacks of using a limited partnership is that the person managing the investments, the general partner, has unlimited liability.  That means if things go bad, he or she is on the hook and could have all of their personal assets on the line.  Thankfully, a large number of states have created a special type of investment vehicle known as a limited liability limited partnership to avoid this problem.  In this article, I'll walk you through what a limited liability limited partnership (LLLP) is and how it is used, along with its pros and cons. More

Investing in Master Limited Partnerships

Master Limited Partnerships

Did you know that it is possible you have invested in limited partnership units and not shares of stock without even knowing it?  Sometimes, these limited partnership units (or LP units) trade on the open market and are mistaken for shares of common stock.  When you call your broker with instructions to buy them, your broker actually buys LP units.  The tax consequences for such a mistake could be huge.  Find out just what is at stake ... More

What Is a Hedge Fund?

Hedge funds are often structured as limited partnerships.

Almost all hedge funds and private equity funds are structured as limited partnerships.  Because of their unique rules and regulations, only accredited investors and sophisticated investors are allowed to invest in a hedge fund.  If you have ever wanted to understand what a hedge fund is, what it does, how it earned its name, how its managers are paid, what accredited and sophisticated investors are, and more, this brief overview was designed for you! More