The Tax Court has reopened the question of whether limited partners are entitled to an exemption from self-employment taxes—an issue that’s been in hibernation for over 13 years.  The Tax Court recently concluded that status as a limited partner does not necessarily exempt a partner from self-employment taxes; the exemption depends on the partner’s level of participation in partnership business. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of small businesses in Advisor’s Journal, see IRS Announces Lenient Lien Program for Small Business (CC 11-48)

For in-depth analysis of partnership taxation, see Advisor’s Main Library: H–Partnership Taxation

Tags: Business, Corporation, Internal Revenue Service, Limited Liability Company, Limited partnership, Self-employment, Small business, Tax

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