However, before describing the mouth watering menu of financial benefits that can be realized with a FLP, I must caution you to realize that there is a price to be paid. Thousands of investors have lost billions in bad investments that were structured as limited partnerships.
Many investors therefore have an aversion to anything remotely connected with limited partnerships.
However, huge amounts have also been lost by investors in corporations. Over time, the greatest losses occur in unincorporated proprietorships and informal general partnerships. It isn't the form of the business that causes the losses. A limited partnership is simply a legal arrangement where investors are treated like partners for tax purposes, but like corporate stockholders for liability purposes. The limited partner is not subject to any debts of the partnership in excess of the limited partners' capital.