Depreciation for Syndication Sponsors?

[Dave Holman]

I'm structuring a new syndication and two CPAs disagree. One thinks that General Partners can't take depreciation on their carried interest (until all Limited Partner capital accounts go negative), only on actual cash contributed and the other thinks that allocating depreciation based on overall sponsor ownership (vs cash contributed) is correct. Who is right? 

[Eamonn McElroy]

@Jesse Daconta

True.  But we must have substantial economic effect for those operating agreement allocations to be respected.

One of the big reasons partnerships are flexible, often advantageous, and often underrated by both practitioners and taxpayers alike IMO.