The broad category of partnerships and other passthrough entities contains news, analysis, documents and other recent developments covering the most common types of passthrough entities, which have their own topic areas, as well as items that affect all of them or some less-common entities.
Partnerships are generally discussed in Subchapter K of the Internal Revenue Code. A partnership is defined in section 761, and is one of the options to elect, or elect out of, in the “check the box” entity classification rules of section 7701. Specialized forms of partnership include limited partnerships, limited liability partnerships, publicly traded partnerships (defined in section 7704) and electing large partnerships. (Discussed at section 771, et seq.)
Small business corporations that elect treatment under Subchapter S of the Internal Revenue code (section 1361, et seq.) are treated as flow-through entities regarding income and loss. In order to elect “S corporation” treatment, the small business corporation must be a domestic corporation, may not have partnerships or corporations as shareholders, and may have only one class of stock. Shareholders must be individuals who are United States citizens or residents, estates, certain eligible trusts, or certain tax-exempt organizations.
A limited liability company (LLC) provides the limited liability features of a corporation, but is a pass-through entity for federal tax purposes. For federal tax purposes, an LLC is generally treated as a partnership; however, it can elect to be treated as a corporation, whether as a C-corporation or, if eligible, as an S-corporation.
Tax Analysts consistently and promptly reports all relevant developments regarding taxation of partnerships and other passthrough entities.
Tax Notes Federal and Tax Notes Today Federal subscribers have free access to James M. Peaslee and David Z. Nirenberg, Federal Income Taxation of Securitization Transactions and Related Topics (Fifth Edition). The book discusses in a number of places the consequences of having partnerships as issuers in securitizations, contrasting them with grantor trusts and with offshore corporations. For a roadmap to where topics are discussed, see Chapter 2, Part M. The book also discusses elections out of subchapter K by state law trusts, and withholding tax issues for partnerships with foreign investors. Real estate mortgage investment conduits (REMICs), and REITs as owners of mortgages, are also covered. Partnerships used to create tender option bonds are discussed in Chapter 2, Part K, and Chapter 14, Part D.2.
