What assets can the limited partnership own and what assets should it not own?

The limited partnership "LP" is an excellent vehicle to safeguard savings, CDs, money market funds, mutual funds, stocks, bonds, REIT interests, C corporation shares, limited liability company memberships and even limited partnership interests in other limited partnerships. However, the LP cannot own S corporation shares. It should not own annuities (which may then lose their tax deferral). Retirement accounts or special accounts – such as 529 plans – should usually remain outside the LP. Moreover, an LP shouldn't own liability-producing assets such as real estate, equipment or vehicles since the LP's general partners are personally liable for lawsuits arising from its assets. That's why it's preferable to title your 'dangerous' assets to a limited liability company. And as we said earlier, the family home should generally not be owned by a limited partnership. While transfers of assets to a limited partnership generally have no tax consequence, it is always wisest to check with your accountant about the tax consequences before you title any asset to a limited partnership – or any other entity.