News & Analysis as of

Limited Partnerships

Eversheds Sutherland (US) LLP

A Sirius Shift: Fifth Circuit Overrules The Tax Court In Defining “Limited Partner” For Self-Employment Tax Purposes

On January 16, 2026, the Fifth Circuit decided Sirius Solutions, L.L.L.P. v. Commissioner, which vacated a prior decision of the Tax Court that had denied limited partners in a state law limited partnership the benefit of the...more

Cooley LLP

2026 Outlook: Limited Partners Looking to Shape Fund Structures and Liquidity Strategies

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The private funds landscape is entering a new phase in 2026, with limited partners (LPs) exerting greater influence on fund design and prioritizing liquidity solutions....more

Keating Muething & Klekamp PLL

A Tax Win for Limited Partners

A recent federal court decision furnishes limited partners with a significant tax victory. The Fifth Circuit Court of Appeals recently decided that limited partners are eligible for the self-employment tax exclusion under...more

Winstead PC

Fifth Circuit Rejects Tax Court’s Definition of “Limited Partner” for Self-Employment Tax Purposes

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The U.S. Court of Appeals for the Fifth Circuit ruled that the meaning of “limited partner” under Section 1402(a)(13) of the Internal Revenue Code of 1986, as amended (the “Code”), is determined under state law. ...more

Seward & Kissel LLP

Sirius-ly? Another Self-Employment Tax Ruling!

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In the latest self-employment tax ruling, the Fifth Circuit Court of Appeals issued a ruling in Sirius Solutions, L.L.L.P. v. Commissioner (the “Ruling”) that will ultimately permit state-law limited partners to exclude their...more

Proskauer - Tax Talks

Fifth Circuit in Sirius Solutions Reverses Tax Court and Exempts Limited Partners from Self-Employment Tax

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On January 16, 2026, in Sirius Solutions, L.L.L.P. v. Commissioner, No. 24-60240 (5th Cir. Jan. 16, 2026), the U.S. Court of Appeals for the Fifth Circuit reversed the Tax Court and held that, for self-employment tax...more

Stinson LLP

Update on Limited Partner Exception to Self-Employment Tax Liability: Fifth Circuit Decision Revives the Issue

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In the summer of 2025, we issued an alert on this subject, U.S. Tax Court Issues Ruling on Self-Employment Tax Exception for Limited Partners (06.11.2025). The case discussed in that alert was the third of a series of...more

Nossaman LLP

New Court Decision Can Ease Self-Employment Taxes on Partnership and LLC Owners

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This January, the Fifth Circuit Court of Appeals in Sirius Solutions L.L.L.P. v. Commissioner reversed a pro-IRS decision by the United States Tax Court and eased the burden of self-employment tax for passive owners in...more

Adler Pollock & Sheehan P.C.

A Sirius Exception for Limited Partner Taxation

On January 16, 2026, the United States Court of Appeals for the Fifth Circuit issued a ruling defining the term “limited partner” as used in the Internal Revenue Code of 1986, as amended (the “Code”). The Court held that a...more

Skadden, Arps, Slate, Meagher & Flom LLP

Fifth Circuit Rejects IRS’ ‘Passive Investor’ Test for Limited Partner Exception in Self-Employment Tax

On January 16, 2026, the U.S. Court of Appeals for the Fifth Circuit decisively rejected the IRS’ attempt to narrow the definition of “limited partner” for purposes of the self-employment tax exclusion under section...more

Akin Gump Strauss Hauer & Feld LLP

Fifth Circuit Overrules Tax Court, Providing Major Victory for Limited Partners on Self-Employment Tax

In a significant decision for the investment funds industry, the U.S. Court of Appeals for the Fifth Circuit has officially rejected the Internal Revenue Service (IRS)’s “passive investor” test for the limited partner...more

Morrison & Foerster LLP

Fifth Circuit Rejects “Passive Investor” Test for the SECA Limited Partner Exception in Sirius Solutions

On January 16, 2026, the U.S. Court of Appeals for the Fifth Circuit issued a closely watched decision in Sirius Solutions, L.L.L.P. v. Commissioner (“Sirius”), vacating and remanding the Tax Court’s holding that certain...more

Haynes Boone

Fifth Circuit Rejects “Passive Investor” Test for Limited Partner Exception from Self-Employment Tax

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On January 16, 2026, the U.S. Court of Appeals for the Fifth Circuit rejected the “Passive Investor” test used by the Tax Court in Soroban Capital Partners LP v. Commissioner (“Soroban”) and determined that limited partners...more

Morgan Lewis

Fifth Circuit Rejects ‘Passive Investor’ Test for Limited Partner Exception to Self-Employment Tax

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On January 16, 2026, the US Court of Appeals for the Fifth Circuit became the first federal appellate court to interpret the “limited partner” exception from self-employment tax under Section 1402(a)(13) of the Internal...more

Rivkin Radler LLP

“Limited Partner”? The Exclusion of Net Earnings from Self-Employment

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Last week, the federal Court of Appeals for the Fifth Circuit ruled that the U.S. Tax Court had misinterpreted the Code’s self-employment tax rules as they apply to individuals who hold limited partnership interests in a...more

Greenberg Glusker LLP

New Case Gives Roadmap for Avoiding Self-Employment Tax

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On January 16, 2026, the Fifth Circuit, in Sirius Solutions L.L.L.P. v. Commissioner (“Sirius”), reversed the Tax Court and held (in a 2-1 decision) that partners with limited liability are not subject to self-employment tax...more

Hendershot Cowart P.C.

Key Factors to Consider When Selecting a Business Entity Structure for your Texas Business

Hendershot Cowart P.C. on

Selecting your business entity is one of the most consequential decisions you'll make as a Texas entrepreneur. The wrong choice can cost you thousands in unnecessary taxes, expose your personal assets to business liabilities,...more

Holland & Knight LLP

Fifth Circuit Rejects Government's "Passive Investor" Test for Limited Partner Exception

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The U.S. Court of Appeals for the Fifth Circuit issued a pivotal decision in Sirius Solutions, L.L.L.P. v. Commissioner on January 16, 2026, rejecting the government's "passive investor" test and instead finding that a...more

Goodwin

New corporate and limited partnership requirements under The Economic Crime and Corporate Transparency Act 2023 (ECCTA): A...

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ECCTA introduces wide-ranging and significant reforms to UK company and UK limited partnership (UKLP) laws. Its principal objectives are to: (i) expand the role of the registrar of companies (the Registrar) and strengthen the...more

DLA Piper

Institutional Investor Newsletter - Q4 2025

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1. A banner year: Secondary market transactions reach record levels - Transaction volume in the secondary market is on track for another record year, reaching USD102 billion in just the first six months of 2025 and USD165...more

Proskauer Rose LLP

Delaware Chancery Litigation Highlights Considerations for GP-Led Secondaries

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An action filed last month in the Delaware Court of Chancery by an investor in a private equity fund highlights the potential risks to fund sponsors when investors are dissatisfied with continuation vehicle (“CV”)...more

Walkers

Beyond the contract: The modern reach of equity in corporate relationships

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Like the English Insolvency Act 1986, and in common with multiple jurisdictions across the common law world, including Australia, New Zealand, Hong Kong, Singapore, Malaysia, India, Ireland, Bermuda and the Cayman Islands,...more

Farrell Fritz, P.C.

Swing of the Pendulum: A Tale of Two “For Cause” Removals

Farrell Fritz, P.C. on

Strict compliance with contractual conditions precedent, yea or nay? In New York, it depends. Now, the general rule is that strict compliance with contractual conditions precedent is required....more

Goodwin

UK Carried Interest Tax Regime - Finance Bill 2026

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In late October of 2024 the UK Government announced its plans to bring carried interest within the income tax regime from April 2026, to be taxed as deemed trading income, subject to an effective tax rate of 34.1%....more

The Rodman Law Group, LLC

Navigating the Transfer of a Venture Capital Fund Investor’s Interest

When a limited partner notifies a venture capital fund of its intention to transfer its limited partnership interest to an unrelated assignee, the general partner should follow a structured process to ensure compliance with...more

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