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Partnership Tax Planning
Partnerships and limited liability companies enjoy substantial tax advantages compared to corporations. They avoid the “double-tax” imposed on the income of large or publicly traded C corporations, and they also enjoy much greater flexibility than S corporations. These advantages come at the cost of considerable tax complexity.
Seemingly simple transactions, which would not require tax planning if done in a corporation or sole proprietorship, can present tax planning opportunities as well as traps for the unwary. Understanding when to consult with a specialist in partnership taxation can be very important.
- Some frequently asked partnership tax questions include:
- How should a new or existing partner who performs services as a manager be compensated?
- How can self-employment and net investment income taxes be minimized?
- How should profits interests be structured?
- What is the best way to take in a new partner, transfer a partnership interest or liquidate a partnership?
- What are the consequences of incurring or paying partnership debt or changing the way the partners share in a partnership liability?
- What should be done in anticipation of a merger or acquisition?
- Is the partnership agreement structured and drafted properly, from a tax perspective?
RSM can help answer these questions and advise you generally on the tax issues presented by your business plans and strategies.
Reforms of U.S. partnership audit laws will transform the audit landscape for private equity and real estate partners.
In a request for comments, the service outlines potential calculation methods – but also suggests disallowing an extremely common method.
The ability to revoke elections and file amended returns means partnership may have more than one option to benefit from CARES Act.
Notice 2020-23 clarifies that most filing, payment and election obligations for S corporations and partnerships is postponed until July 15.