Partnership and Tax-Exempt Organizations

Suppose that you have a new client who would like to form a partnership. The client has asked you to assist in avoiding transactions that might result in a taxable transaction for the partnership.

Recommend at least two transactions that the partnership should avoid in order to prevent a taxable transaction to the partnership. Explain how your answer would differ if the company was an S-corporation rather than a partnership.
Provide a rationale for your recommendation.

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