Sweat equity taxation

[Matyas Sustik]

I hoped some experinced members could point me to the right resources on the following situation.

Assume you syndicate a deal and as part compensation for putting the deal deal together, for finding the right property etc. you are granted a 10% equity interest in the partnership that is formed for the venture. Again, you do not put cash in like the passive investors. For example, assume that 50 passive investors contribute 50k each and using these funds the partnership purchases an apartment complex. But the passive investors only gain 90%/50 = 1.8% ownership each, while you gain 10% ownership without outlaying any cash.

Is this considered to be a taxable event? I heard arguments that this is something called sweat equity and that the IRS will tax it as ordinary income. Basically, the 10% grant represents a 250k value of the total 2.5M of the partnership assets. I also know that when a company grants stock to employees (say on a vesting schedule) then income tax is deducted when the stock is vested. The value of the stock at vesting is considered ordinary income.

So the questions:

1. Is there a large tax bill due for this grant in the year of forming the partnership?

2. What are the implications for the partnership tax return? Does the partnership itself have to pay some tax (like when it pays wages to someone, there could be social security taxes etc.)

3. The other investors get diluted on day one and essentially pay for the 10% ownership given away. Now, is that an expense for these partners that they can deduct and get some tax benefits?

Thanks for anyone reading this and considering helping me out.