General Partner Cash Flow Projection

This page contains all the fees and cash distributions due the General Partner / Managing Member from the Partnership / LLC. Additionally his tax liabilities are shown together with the Net Present Value of his cash flows before and after tax.

General Fees contains all cash due the General Partner / Managing Member from the Fee Pages. For the Sample Apartments, only the $10,000 fee was entered.

Distributed Cash is the General Partner / Managing Member distributions from the Partnership / LLC, as shown also in the Source and Use of Pro- ceeds page. As with the column on that page, any loans made by the General Part- ner / Managing Member to fund shortfalls are shown in this column, together with any interest on these loans.

Total Cash Flow is the sum of the first two columns, showing the total cash flow to the General Partner / Managing Member before tax. The Net Present Value of this cash flow column is shown below here as the General Partner’s Present Value Before Tax ($21,884). This Net Present Value is computed using the assumed Present Value Discount Rate Before Tax (10%).

Taxable Income is the sum of the tax liabilities from the Fee Pages and the tax liabilities allocated the General Partner / Managing Member by the Partnership / LLC. Since the model assumes that all partnership fees represent taxable income to the General Partner / Managing Member, this reduces to the sum of the “General / Manager Fees” column and the allocated tax liabilities. Per the assumptions, 10% of the Partnership / LLC taxable income is allocated to the General Partner / Managing Member. At acquisition here, this income is -$10,000 (from the Partnership Taxable Income Projection ), so -$1,000 is allocated to the General Partner, and his tax liability from the acquisition is the $10,000 fee less $1,000, or $9,000. The allocated capital gain liability is treated in the same way. Thus the $27,983 shown here at the sale is 10% of the capital gain, or $29,819, less 10% of the -$18,363 ordinary income at sale, or $1,836.

Taxes is the “Taxable Income” multiplied by the General Partner / Managing Member Tax Rate assumption (50% in this case), showing the tax to be paid by the General Partner (positive amounts indicate tax savings). In the case of the General Partner, the Passive Loss Provision is not applied.

Cash Flow After Tax is the sum of the “Total Cash Flow” and “Taxes” Columns, showing the General Partner / Managing Member Cash Flow position after tax. The Net Present Value of this cash flow is shown below here as the General Partner’s Present Value After Tax ($17,959). The assumed Present Value Discount Rate After Tax (10% here) is used to compute this Net Present Value.