Appendix D — Voting Interest Entity Model

D.1 General Consolidation Principles

The flowchart below shows the detailed steps that a reporting entity should follow when evaluating a legal entity under the voting interest entity model.

ASC 810-10

05-3 Throughout this Subtopic, any reference to a limited partnership includes limited partnerships and similar legal entities. A similar legal entity is an entity (such as a limited liability company) that has governing provisions that are the functional equivalent of a limited partnership. In such entities, a managing member is the functional equivalent of a general partner, and a nonmanaging member is the functional equivalent of a limited partner.

15-8 For legal entities other than limited partnerships, the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree.

15-8A Given the purpose and design of limited partnerships, kick-out rights through voting interests are analogous to voting rights held by shareholders of a corporation. For limited partnerships, the usual condition for a controlling financial interest, as a general rule, is ownership by one limited partner, directly or indirectly, of more than 50 percent of the limited partnership’s kick-out rights through voting interests. The power to control also may exist with a lesser percentage of ownership, for example, by contract, lease, agreement with partners, or by court decree.

15-9 A majority-owned subsidiary is an entity separate from its parent and may be a variable interest entity (VIE) that is subject to consolidation in accordance with the Variable Interest Entities Subsections of this Subtopic. Therefore, a reporting entity with an explicit or implicit interest in a legal entity within the scope of the Variable Interest Entities Subsections shall follow the guidance in the Variable Interest Entities Subsections.

15-10 A reporting entity shall apply consolidation guidance for entities that are not in the scope of the Variable Interest Entities Subsections (see the Variable Interest Entities Subsection of this Section) as follows:

All majority-owned subsidiaries — all entities in which a parent has a controlling financial interest — shall be consolidated. However, there are exceptions to this general rule.
1. A majority-owned subsidiary shall not be consolidated if control does not rest with the majority owner — for instance, if any of the following are present:
  1. The subsidiary is in legal reorganization
  2. The subsidiary is in bankruptcy
  3. The subsidiary operates under foreign exchange restrictions, controls, or other governmentally imposed uncertainties so severe that they cast significant doubt on the parent’s ability to control the subsidiary.
  4. In some instances, the powers of a shareholder with a majority voting interest or limited partner with a majority of kick-out rights through voting interests to control the operations or assets of the investee are restricted in certain respects by approval or veto rights granted to the noncontrolling shareholder or limited partner (hereafter referred to as noncontrolling rights). In paragraphs 810-10-25-2 through 25-14, the term noncontrolling shareholder refers to one or more noncontrolling shareholders and the terms limited partner and general partner refer to one or more limited or general partners. Those noncontrolling rights may have little or no impact on the ability of a shareholder with a majority voting interest or limited partner with a majority of kick-out rights through voting interests to control the investee’s operations or assets, or, alternatively, those rights may be so restrictive as to call into question whether control rests with the majority owner.
  5. Control exists through means other than through ownership of a majority voting interest or a majority of kick-out rights through voting interests, for example as described in (c) through (e).
2. A majority-owned subsidiary in which a parent has a controlling financial interest shall not be consolidated if the parent is a broker-dealer within the scope of Topic 940 and control is likely to be temporary.
3. Subparagraph superseded by Accounting Standards Update No. 2013-08.
Subparagraph superseded by Accounting Standards Update No. 2015-02.
Subtopic 810-30 shall be applied to determine the consolidation status of a research and development arrangement.
The Consolidation of Entities Controlled by Contract Subsections of this Subtopic shall be applied to determine whether a contractual management relationship represents a controlling financial interest.
Paragraph 710-10-45-1 addresses the circumstances in which the accounts of a rabbi trust that is not a VIE (see the Variable Interest Entities Subsections for guidance on VIEs) shall be consolidated with the accounts of the employer in the financial statements of the employer.

25-1 For legal entities other than limited partnerships, consolidation is appropriate if a reporting entity has a controlling financial interest in another entity and a specific scope exception does not apply (see Section 810-10-15). The usual condition for a controlling financial interest is ownership of a majority voting interest, but in some circumstances control does not rest with the majority owner.

25-1A Given the purpose and design of limited partnerships, kick-out rights through voting interests are analogous to voting rights held by shareholders of a corporation. Consolidation is appropriate if a reporting entity has a controlling financial interest in a limited partnership and a specific scope exception does not apply (see Section 810-10-15). The usual condition for a controlling financial interest in a limited partnership is ownership of a majority of the limited partnership’s kick-out rights through voting interests, but, in some circumstances, control does not rest with the majority owner.

ASC 810-10 — Glossary

Kick-Out Rights (Voting Interest Entity Definition)

The rights underlying the limited partner’s or partners’ ability to dissolve (liquidate) the limited partnership or otherwise remove the general partners without cause.

Under the voting interest entity model, a reporting entity consolidates a legal entity when it has a controlling financial interest in the legal entity through its ownership of voting interests.2 Limited partnerships that are not VIEs are evaluated for consolidation in essentially the same manner as corporations that are not VIEs. More specifically, under the voting interest entity model, if there is a presumption that a party controls an entity (i.e., a party holding over 50 percent of the voting interest in a corporation or a party in a limited partnership holding unilateral kick-out or liquidation rights), a reporting entity must consider whether that presumption is overcome because of the existence of substantive participating rights held by other parties.

D.1.1 Limited Partnerships (and Similar3 Entities)

Under the voting interest entity model, a general partner will not consolidate a limited partnership.4 Rather, the concept of a controlling financial interest is premised on whether a limited partner owns substantive kick-out rights that give it the unilateral right to, without cause, remove the general partner or dissolve the partnership.

D.1.2 Legal Entities That Are Not Limited Partnerships (or Similar Entities)

For legal entities that are not limited partnerships, a controlling financial interest is premised on whether a reporting entity has voting interests that give it control over the financial and operating policies of the legal entity. A controlling financial interest typically exists when a reporting entity owns more than 50 percent of the outstanding voting shares of another entity. However, there are exceptions to this general principle, as discussed below.

D.1.3 General Concept of Control

There is no precise definition in the authoritative accounting literature of “control” as it applies to consolidation and related matters. ASC 850-10-20 states that control is the “possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an entity through ownership, by contract, or otherwise.” This definition of control is substantively the same as that in SEC Regulation S-X, Rule 1-02(g).

ASC 810-10-15-8 and 15-8A indicate that an investor with a majority voting interest, or a limited partner with a majority of kick-out rights through voting interests, will generally control a legal entity. However, ASC 810-10-15-8 and 15-8A also provide exceptions to this guidance and indicate that the power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other owners of voting interests, or court decree. Therefore, conclusions about control should be based on an evaluation of the specific facts and circumstances. In some situations, an investor with less than a majority voting interest, or a limited partner with less than a majority of kick-out rights, can control a legal entity. In other situations, the power of a stockholder with a majority voting interest, or a limited partner with a majority of kick-out rights, to control a legal entity does not exist with the majority owner because of noncontrolling rights or as a result of other factors.

D.1.3.1 Control Without a Majority Voting Interest

In the absence of participating rights held by other parties, the following factors may indicate substantive control of a legal entity by an investor, even if the investor does not own a majority of the voting interests in the legal entity:

For legal entities other than limited partnerships, control of the board of directors/governing body or other decision-making body that is responsible for making the significant decisions of the entity.
For limited partnerships, ASC 810-10-15-8A states that “kick-out rights through voting interests are analogous to voting rights held by shareholders of a corporation.” Therefore, the usual condition for a controlling financial interest in a limited partnership, as a general rule, is ownership by one limited partner, directly or indirectly, of more than 50 percent of the limited partnership’s kick-out rights through voting interests.
Notwithstanding lack of ownership of a majority of voting interests by contract, lease, agreement with other owners of voting interests, or court decree, an investor has control of sufficient proxy rights for a majority of the voting interests of a legal entity.
The investor has the ability to unilaterally set or significantly change the operating or capital policies of the investee, including budgets, in the ordinary course of business.
Possession of options or other securities convertible into voting interests, if such securities are currently exercisable, at little or no economic cost (see Section D.1.4).

The mere existence of a participating right or a protective right would not give a reporting entity that lacks majority voting interests a controlling financial interest in a legal entity. For guidance on the accounting in such a scenario, including a situation in which a joint venture arrangement may exist, see Deloitte’s Roadmap Equity Method Investments and Joint Ventures.

Example D-1

Company X previously owned 90 percent of the common stock in Company Y (a corporation), controlled the election of directors to Y’s board, and had voting power over Y. All of Y’s significant decisions are made by Y’s board. Company X subsequently sold 40 percent of its common stock investment in Y, reducing its voting interest in Y to 50 percent. However, X continued to control the election of directors to Y’s board, and the other equity holders did not have substantive participating rights. Company Y is not a VIE.

In this example, X would continue to consolidate Y even though it no longer owns a majority voting interest in Y because X controls the board of directors and governing body of Y.

D.1.3.2 Lack of Control With a Majority Voting Interest

The powers of a stockholder with a majority voting interest, or a limited partner with a majority of kick-out rights, to control a legal entity does not exist with the majority owner when other investors have substantive participating rights (see Section D.2 for a discussion of participating rights). In addition, when any of the following conditions exist, an investor does not have control over a legal entity even if the investor owns a majority of the voting interests in the legal entity:

The legal entity is undergoing a legal reorganization.
The legal entity is in bankruptcy.
The legal entity is operating under foreign exchange restrictions, controls, or other governmentally imposed uncertainties that are so severe that they cast significant doubt on the controlling shareholder’s ability to control the legal entity.
The governing provisions of a legal entity other than a limited partnership require greater than a simple majority vote to approve decisions regarding the financial and operating policies of the legal entity that are made in the ordinary course of the legal entity’s business.5
The legal entity is temporarily controlled by a parent that is a broker-dealer within the scope of ASC 940.

See Section D.3 for additional discussion of these situations.

D.1.4 Consideration of Potential Voting Rights in Evaluating Control

A reporting entity may hold certain contractual rights that allow it to acquire additional voting interests in a legal entity. For example, the reporting entity may have a call option to purchase additional equity in a legal entity that is not a limited partnership (or a limited partner may have the contractual right to purchase limited partnership interests held by other limited partners). Potential voting rights may also exist through other types of securities that are convertible into voting interests (e.g., convertible securities).

ASC 810-10 does not specifically address how to consider potential voting rights in determining whether a reporting entity has a controlling financial interest in a legal entity that is not a VIE (other than the impact that potential voting rights may have on the determination of whether a participating right is substantive — see additional discussion in Section D.2.3). As a general principle, the assessment of control of a legal entity that is not a VIE should be made on the basis of existing voting interests owned (and other existing contractual agreements that permit control at the time of assessment) as opposed to contingent actions or events that must occur before a controlling financial interest is obtained (e.g., exercising a call option and purchasing additional voting interests in a legal entity). Thus, a potential voting right would not typically affect the determination of whether a controlling financial interest is present.6 However, potential voting rights may reflect substantive control over a legal entity if a reporting entity can obtain the additional voting interests at little or no economic cost; that is, when the purchase price is considered nonsubstantive. A reporting entity must use significant judgment and evaluate all relevant facts and circumstances to determine whether the purchase price is nonsubstantive.

The above discussion focuses on potential voting rights that may be obtained by a reporting entity through the acquisition of additional voting interests in a legal entity. The same general principle discussed above would also apply when a reporting entity that does not own a majority of voting interests has an existing contract, lease, or other agreement that will give the reporting entity a controlling financial interest in the future. That is, such contract or agreement would typically not result in the reporting entity’s possession of a controlling financial interest until the date at which it obtains control. However, all facts and circumstances must be considered. For example, the reporting entity may be deemed to currently have a controlling financial interest if, on the basis of the terms of the contract, lease, or other agreement, no significant actions regarding the financial and operating policies of the reporting entity may be taken before the date on which the reporting entity obtains the controlling financial interest.

Under the voting interest entity model, potential voting rights that may be (or will be) obtained in the future (e.g., potential voting rights that may be obtained with little or no economic cost on a future date, which would include a limited partner’s ability to remove the general partner or liquidate the limited partnership) will have no impact on the consolidation analysis unless (or until) the possibility is remote (i.e., it is not reasonably possible) that significant decisions in the ordinary course of business will be made before the date on which the potential voting right is exercisable. In making this determination, the reporting entity must exercise significant judgment in light of all relevant facts and circumstances. In many cases, there may be nothing to preclude a majority investor from taking a significant action before the date on which the potential voting right becomes exercisable; that is, unless there is evidence to the contrary, in many cases there will be a greater than remote possibility that a significant decision might be made before the date on which the potential voting right is exercisable.

D.1.5 Consideration of Indirect Ownership Interests in Evaluating Control

In determining whether a controlling financial interest is present, a reporting entity should consider not only its directly owned voting interests but also any voting interests indirectly owned in a legal entity. In certain instances, a reporting entity that does not directly hold a majority of voting interests in a legal entity may have a controlling financial interest in the legal entity through a combination of direct and indirect voting interests.

An indirect voting interest is deemed to exist when a reporting entity controls another owner of voting interests in a legal entity. If a reporting entity controls another investor in the legal entity, the reporting entity should consider the voting interests owned by the other investor in its analysis of whether it has a controlling financial interest in a legal entity. The consideration of indirectly owned voting interests is required even if the reporting entity does not consolidate the other investor (because, for example, the legal entity qualifies for an exception to the consolidation requirements in ASC 810-10).

However, note that under the voting interest entity model, in the absence of a contract or other agreement that gives a reporting entity the right to vote for the interests held by its related parties, the reporting entity is not required to consider the voting interests owned by its related parties that it does not control.

Example D-2

Reporting Entity A owns 60 percent of Entity B (a corporation) and consolidates it under ASC 810-10. Entity B owns 51 percent of Entity C (a corporation) and consolidates it under ASC 810-10. Reporting Entity A indirectly controls C through B and should consolidate C (through A’s consolidation of B) even though the noncontrolling interest would be more than 69 percent (noncontrolling interest in Entity B of 40% × 51% of Entity C = 20.4%, added to 49% “other” ownership in Entity C = 69.4%).

In the above scenario, if A did not control (i.e., consolidate) B, A would not indirectly control C and would not consolidate C.

Example D-3

Reporting Entity A owns 60 percent of the limited partnership interests in Partnership B and 10 percent of the limited partnership interests in Partnership C. Partnership B owns 49 percent of the limited partnership interests in Partnership C. The respective general partner of both B and C may be removed by a simple majority vote of limited partners that have substantive kick-out rights and are not under common control with, or acting on behalf of, the general partner. Other limited partners do not have substantive participating rights. Reporting Entity A controls C through direct ownership (10 percent) and indirect ownership (49 percent held by B, a majority-owned subsidiary) of the limited partnership interests in C and therefore should consolidate C. Although A is required to consolidate C because it has control through direct and indirect ownership of voting interests, B would not consolidate C in its separate financial statements because A’s ownership in C is not attributed to B.

Example D-4

Reporting Entity A owns 49 percent of Entity B (a corporation) and 40 percent of Entity C (a corporation). Entity B owns 40 percent of C. Reporting Entity A does not control and should not consolidate B. Reporting Entity A also would not consolidate C despite having an almost 60 percent combined direct and indirect ownership interest in C because Entity A does not unilaterally control B’s voting interest in C.

D.1.6 Consideration of Kick-Out Rights for Limited Partnerships

As noted in ASC 810-10-25-1A, kick-out rights in a limited partnership are viewed as the equivalent of voting shares in a corporation. Accordingly, in the absence of participating rights held by other limited partners, a limited partner that owns substantive kick-out rights that give it the unilateral right to, without cause, remove the general partner or dissolve the partnership would have a controlling financial interest in the limited partnership. A reporting entity must evaluate the relevant facts and circumstances under ASC 810-10-25-14A through 25-14C to determine whether a kick-out right is substantive (see additional discussion in Section D.2.3.1).

The guidance in ASC 810-10-25-14A through 25-14C on whether kick-out rights are substantive should be applied in the determination of whether (1) a limited partnership is a VIE under ASC 810-10-15-14(b)(1)(ii) and (2) whether a single limited partner has a controlling financial interest in a limited partnership. If a conclusion is reached that the kick-out rights held by limited partners are not substantive (and the limited partners are not able to exercise substantive participating rights), then the limited partnership would be a VIE and not a voting interest entity. It is not possible to conclude that the same kick-out rights are (1) substantive in the evaluation of whether a limited partnership is a VIE and (2) nonsubstantive in the evaluation of whether a majority owner of limited partnership interests has a controlling financial interest in the limited partnership.

D.1.6.1 Kick-Out Rights Held by Related Parties

In discussing the consolidation of limited partnerships that are voting interest entities, ASC 810-10-15-8A refers to ownership by one limited partner “directly or indirectly” of more than 50 percent of the limited partnership’s kick-out rights through voting interests. Although not specifically addressed in ASC 810-10, the concept of owning kick-out rights “indirectly” does not extend beyond the ownership of kick-out rights through the control of another limited partner that also owns kick-out rights through voting interests. That is, for a limited partnership that is not a VIE, in the absence of a contract or other agreement that gives the limited partner the right to vote the kick-out rights held by its related parties, the limited partner is not required to consider the kick-out rights held by its related parties that it does not control. Rather, the limited partner is only required to consider the nature of related-party relationships to determine whether a noncontrolling interest right is a substantive participating right.

Example D-5

Reporting Entity A owns 49 percent of the limited partnership interests of Partnership B and 40 percent of the voting shares of Entity C (a corporation), which owns 40 percent of the limited partnership interests in B. Reporting Entity A accounts for its investment in C by using the equity method of accounting. Reporting Entity A does not control and should not consolidate B. Although A has a combined direct and indirect limited partnership interest of 65 percent in B, which is calculated as 49% + (40% × 40%), A does not unilaterally control the kick-out rights of B because it exerts only significant influence over the limited partnership interests owned indirectly through C.

D.1.6.2 Evaluation of Liquidation and Withdrawal Rights as Kick-Out Rights

As discussed in Section 2.4, two different definitions of kick-out rights apply depending on whether the legal entity is (1) a limited partnership (or similar entity) that uses the voting interest entity definition or (2) other than a limited partnership (or similar entity) that uses the VIE definition. According to the definition of a voting interest entity in the ASC master glossary, the right "to dissolve (liquidate) the limited partnership . . . without cause" is a kick-out right.

Paragraph BC49 of ASU 2015-02 provides the FASB’s thoughts regarding the evaluation of liquidation rights and notes that they “should be considered equivalent to kick-out rights [because they] provide the holders of such rights with the ability to dissolve the entity and, thus, effectively remove the decision maker’s authority.” Paragraph BC49 of ASU 2015-02 further indicates that the Board considered, but rejected, evaluating liquidation rights in a manner similar to kick-out rights “only when it is reasonable that upon liquidation, the investors will receive substantially all of the specific assets under management and can find a replacement manager with sufficient skills to manage those assets.” As noted in paragraph BC49 of ASU 2015-02, the “Board ultimately rejected this view because the outcome for the decision maker is the same regardless of whether the holders of those rights have the ability to obtain the specific assets from the entity upon liquidation or identify an alternative manager [because if] the holders exercise their substantive liquidation rights, similar to kick-out rights, the decision maker’s abilities would be removed.” Therefore, any liquidation right should be considered a kick-out right and would result in a limited partner’s consolidation of a limited partnership that is not a VIE as long as the right (1) is substantive7 and (2) gives a single limited partner the unilateral ability to liquidate a limited partnership. If these conditions are met, the single limited partner would consolidate the limited partnership even if other limited partners have substantive participating rights before liquidation. That is, we believe that a noncontrolling limited partner’s right to exercise a substantive participating right is not relevant to the consolidation analysis when a limited partner has a substantive ability to liquidate the limited partnership, because the potential liquidation effectively negates any participation right.

It is important to distinguish liquidation rights from withdrawal rights since ASC 810-10-25-14B indicates that a reporting entity’s unilateral right to withdraw from an entity that does not require dissolution or liquidation of the entire entity “would not be deemed a kick-out right.” Therefore, a reporting entity should carefully analyze withdrawal rights to determine whether, on the basis of the specific facts and circumstances, they represent liquidation rights.

This may be the case when a limited partnership has only a single limited partner or when a limited partnership’s formation documents require the dissolution of the limited partnership upon exercise of the withdrawal right (e.g., as a result of the exercise of the withdrawal right, the amount of the limited partnership’s remaining assets may decline to a level that triggers dissolution). Withdrawal rights that do not require the dissolution or liquidation of the entire limited partnership do not represent liquidation rights and therefore should not be considered kick-out rights.8 Furthermore, when the exercise of a withdrawal right does require the dissolution or liquidation of the entire limited partnership, the right should only result in a limited partner’s consolidation of a limited partnership if the right (1) is substantive9 and (2) gives a single limited partner the unilateral ability to withdraw and cause either the dissolution or liquidation of the limited partnership. In a manner consistent with a liquidation right discussed above, if these conditions are met, the single limited partner with such a withdrawal right would consolidate the limited partnership even if other limited partners have substantive participating rights before liquidation.

Note also that special consideration is necessary when a liquidation right (or a withdrawal right that represents a liquidation right) is exercisable in the future. In these situations, the right should be evaluated in the same manner as other potential voting rights (see Section D.1.4).

D.1.6.2.1 Evaluation of Buy-Sell Clauses as a Liquidation Right

A buy-sell term in a contractual agreement can take various forms. However, in an arrangement in which two investors each own 50 percent of an entity, a buy-sell clause generally gives each investor the ability to offer to buy out the entire equity interest of another investor (the “offeree”) upon giving notice to the offeree. The investor making the offer (the “offeror”) typically names a price for the offeree’s interest at its discretion. After receiving the offer from the offeror, the offeree typically is contractually required to either (1) sell its entire interest in the entity to the offeror at the named price or (2) buy the offeror’s interest at the named price. Buy-sell agreements are not typically considered liquidation rights. See Example 5-37 in Section 5.3.1.2.6.

D.1.7 Reassessment of Controlling Rights

The initial assessment of controlling rights should be made at the time the reporting entity becomes involved with the voting interest entity. However, rights should be reassessed on a continual basis, and the reporting entity should monitor specific transactions or events that may affect whether it still holds a controlling (or noncontrolling) financial interest in the voting interest entity. Examples of events that may affect this assessment and therefore should be considered include, but are not limited to:

Changes in the total number of shareholders or limited partners and total outstanding voting interests.
Changes in ownership percentages and corresponding changes to voting rights or decision-making rights.
Amendments to governance documents that may affect voting interests or decision-making rights.
Changes in exercisability of potential voting rights. See Section D.1.4.

When a reporting entity considers these events, it should also assess whether the events would qualify as VIE reconsideration events (see Chapter 9 for more information).

Footnotes

Hereafter, unless otherwise specifically noted, “voting interests” refer to voting shares for legal entities other than limited partnerships and kick-out rights for limited partnerships.

For a discussion of what is meant by “similar” entities, see Section 5.3.1.2.1.

As discussed in Section 5.3.1.2, if a simple majority or lower threshold (including a single limited partner) of “unrelated” limited partners (i.e., parties that are not under common control with, or acting on behalf of, the general partner) with equity at risk is unable to exercise substantive kick-out rights or substantive participating rights, the limited partnership is a VIE. Thus, limited partnerships that were consolidated by the general partner under the voting interest entity model before ASU 2015-02 are now subject to consolidation under the VIE subsections of ASC 810-10. Accordingly, a general partner will not consolidate a limited partnership under the voting interest entity model. See Chapter 7 for a discussion of when a general partner would consolidate a limited partnership that is a VIE.

If the right to remove the general partner of a limited partnership requires the exercise of more than a simple majority of kick-out rights, the limited partnership is a VIE. See additional discussion in Section 5.3.1.2.

Potential voting rights could, however, affect the assessment of whether a legal entity is a VIE when those interests represent variable interests in a legal entity.

Paragraph BC49 of ASU 2015-02 states that “[b]arriers to exercise may be different when considering kick-out rights as compared with barriers for liquidation rights and should be evaluated appropriately when assessing whether the rights are substantive.”

As stated in ASC 810-10-25-14B, “[t]he requirement to dissolve or liquidate the entire limited partnership upon the withdrawal of a limited partner or partners shall not be required to be contractual for a withdrawal right to be considered as a potential kick-out right.” Therefore, a reporting entity must determine, on the basis of the facts and circumstances, whether the practical result of the withdrawal will be the required dissolution of the partnership (e.g., the partnership has only one limited partner and the general partner has a nominal interest) or its liquidation.

See footnote 7.

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This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.