"Square peg, meet round hole": classifying LLC members as "general partners" or "limited partners" for federal tax purposes
Article Abstract:
The proper classification of limited liability company members as either general partners or limited partners for income tax purposes is best accomplished by a uniform approach focused on the rights, duties, and statutory authority of unincorporated entities. A clear understanding of federal tax rules, IRC provisions, and Treasury regulations applicable to general and limited partners, as well as the impact of state laws on the rights, duties, and obligations of various business entities' owners, will facilitate proper tax planning and entity classification.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1995
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Check-the-box: the proposed regulations on entity classification
Article Abstract:
The IRS proposed regulations released under IRC section 7701 improve on Notice 95-14's check-the-box proposal by addressing one-member entity issues and developing rules for foreign entities. The check-the-box proposal allows unincorporated businesses that are not publicly traded to elect to be treated as either corporations or partnerships for federal income tax purposes. The proposed regulations identify election procedures, transition rules, and default rules, as well as defining which foreign entities will be presumed to be subject to corporate taxation.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1996
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Section 469: material participation standards for LLC members
Article Abstract:
Members of limited liability companies (LLCs) should not automatically be treated like limited partners in limited partnerships for the purposes of the material participation tests under IRC section 469 passive loss rules. LLC members can participate in management freely, unlike limited partners under state law. The seven material participation tests set forth in the IRS regulations under section 469 should be available to LLC members, and they should not be limited to the three material participation tests available to limited partners.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1996
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- Abstracts: State tax withholding on nonresident partners' shares of partnership income. New GATT agreement may cause the recognition of gain on partnership distributions of marketable securities
- Abstracts: Deficiency notice needed to recover erroneous refund. Refund that offsets deficiency is not a payment for limitations purposes
- Abstracts: Marital deduction lost when children let mom have it all. Marital deduction not allowed for settlement payment
- Abstracts: The incentive effects of accounting based long-term performance plans. Stakeholders versus stockholders and financial ethics: ethics to whom?
- Abstracts: Multinationality: the financial accounting implications. Accounting income and market prices: explaining core-deposit premiums