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Pass-Through Entities Business Taxes

Wilson Sonsini Goodrich & Rosati

California Senate and Assembly Budget Agreement Includes Temporary Suspension on Use of California NOLs and Limitations on Use of...

On May 10, 2024, California Governor Gavin Newsom released a revised budget for 2024-2025 that includes, among other changes, a temporary suspension on the use of net operating losses (NOLs) for businesses with California...more

Miles & Stockbridge P.C.

Md. Comptroller Offers Relief for Missed 2023 PTE Elections

Maryland Comptroller Brooke Lierman issued a letter Feb. 28 to address the challenges and concerns of tax practitioners regarding the policy and procedural changes to pass-through entity (PTE) filings and payments. Most...more

PilieroMazza PLLC

Focus on S Corporations, Part 2: Inadvertent Termination of S Corporation Elections

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The IRS recently provided guidance addressing inadvertent terminations of S Corporation (S Corp) status based on existing provisions in corporate documents that remain after a company makes an S Corp election. This can be a...more

Latham & Watkins LLP

New IRS Unit Leverages AI to Step Up Partnership Audits; Hundreds of New Inquiries Expected

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The IRS’s simmering concern with pass-through entities is heating up, with IRA funds earmarked for increased personnel, AI, and other resources for partnership audits. ...more

Rivkin Radler LLP

Pre-Consolidation Conversions in the Accounting World – Tax Considerations

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Another Change- Last week BDO confirmed that it was going to convert from an entity organized as a limited liability partnership under state law to one organized as a corporation. With that, BDO became the latest in a...more

Sands Anderson PC

Update on Potential Tax Savings Opportunity: Virginia’s Pass-through Entity Tax and SALT Cap Deduction Workaround

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For individual owners of pass-through entities, such as partnerships, limited liability companies (“LLCs”), business trusts, and S Corporations, Virginia’s elective Pass-through Entity Tax (“PTET”) offers potential federal...more

Blank Rome LLP

NYC Corporate Tax “Bright Line” Economic Nexus Adopted and NYC Pass-Through Entity Tax Effective Date Moved Up

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New York State Governor Kathy Hochul has signed into law a bill that imposes “bright-line” economic nexus based on in-City receipts, applicable to tax years beginning on or after January 1, 2022, under the New York City...more

Sands Anderson PC

Virginia’s New Elective PTE Tax and SALT Cap Workaround

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Elective PTE Income Taxes Payable to Virginia - Beginning July 1, 2022, Virginia’s new law establishing a workaround for the federal income tax limitation on deductions for state and local taxes (SALT) became effective....more

Buckingham, Doolittle & Burroughs, LLC

Ohio Income Tax – Ohio Jumps on Trend to Codify SALT Deduction Cap Workaround

Last year, a post explained that investors in Ohio pass-through entities (PTEs) may be able to avoid the $10,000 state and local tax (SALT) deduction cap using Ohio’s composite return election. Now a little over a year later,...more

Burns & Levinson LLP

VAS Holdings v. Commissioner of Revenue - Taxing Out-of-State Entities on the Sale of a Massachusetts Business

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What Was At Stake - At issue in a recent, significant tax decision of the Supreme Judicial Court (“SJC”) was whether the Massachusetts Commissioner of Revenue could tax an out-of-state shareholder on the gains it derived...more

Kerr Russell

Tax Tips for 2022

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All businesses, whether large or small, should frequently evaluate strategies for minimizing their overall tax burden. Here are a few tips that businesses may consider implementing to achieve such tax savings. ...more

Proskauer - Tax Talks

Proposed Regulations Regarding the Aggregate Treatment for Pass-Through Owners of PFIC Stock

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On January 25, 2022, the Internal Revenue Service (the “IRS”) and the Department of the Treasury (“Treasury”) released regulations (the “Final Regulations”) finalizing provisions in prior proposed regulations which generally...more

Kerr Russell

Michigan Enacts SALT Cap Workaround For Pass-Through Entities

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On December 20, 2021, Governor Gretchen Whitmer signed legislation (H.B. 5376) allowing owners of S corporations and partnerships (including limited liability companies taxed as partnerships) to pay their state and local...more

Foster Garvey PC

The Oregon SALT Cap Workaround for Pass-Through Entities Is Finally Here – Governor Kate Brown Has Signed Senate Bill 727 Into Law

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Last fall, the IRS announced, with respect to pass-through entities (LLCs or other entities taxed as partnerships or S corporations), that, if state law allows or requires the entity itself to pay state and local taxes (which...more

Sheppard Mullin Richter & Hampton LLP

California Passes “Workaround” To Federal Limit on State Tax Deduction For Certain Owners of Pass-Through Entities

On July 16, 2021, Governor Newsom signed California Assembly Bill 150 into law, allowing certain owners of passthrough entities to find a way around the current $10,000 federal cap on state and local tax (SALT) deductions for...more

Rivkin Radler LLP

“Opaque Income Sources” + “Tax Gap” = More Enforcement + Tax Hikes = Anyone’s Guess

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Tax Gap- In a report released last week, the U.S. Treasury Department explained that the so-called “tax gap” – i.e., the difference between the amount of federal income taxes owed by taxpayers for a taxable year and the...more

Rivkin Radler LLP

Biden’s Proposed Income Tax Increases And The Sale Of The Baby Boomer Business

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“Yeah, I’m the Tax Man” Last week, several media outlets reported that Mr. Biden will soon propose that Congress increase the federal income tax rate applicable to long-term capital gains recognized by individual...more

Pullman & Comley, LLC

Good News for Owners of Connecticut Pass-Through Entities

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The Internal Revenue Service (IRS) released Notice 2020-75 on November 9, 2020, which validates the federal income tax deductibility of the payment of the Connecticut Pass-Through Entity Tax (the “PET”)....more

Wyrick Robbins Yates & Ponton LLP

Nine Biden Tax Proposals to Know as We Near Election Day

We’re roughly a month from Election Day, and I think it’s safe to say many Americans have strong opinions about who should be our President for the next four years.  I also think it’s safe to say taxes are not the top...more

Perkins Coie

IRS Announces Delay of Certain Periods for 1031 Transactions

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In response to the ongoing coronavirus pandemic (COVID-19), the Internal Revenue Service (the IRS) has taken additional actions intended to provide immediate relief to taxpayers. Delay of Identification and Acquisition...more

Seyfarth Shaw LLP

An Electing Real Property Trade or Business can Revoke its Election on Account of the Change to Qualified Improvement Property...

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On April 10, 2020, the Internal Revenue Service (the “IRS”) issued Revenue Procedure 2020-22 (the “Revenue Procedure”), which (1) permits an “electing real property trade or business” that elected not to be subject to the...more

Morgan Lewis

NJ Enacts Elective Pass-Through Business Tax to Limit Federal Cap Impact on SALT Deduction

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New Jersey recently enacted the “Pass-Through Business Alternative Income Tax Act,” which allows pass-through businesses with at least one member liable for the New Jersey gross income tax to make an election to pay income...more

Williams Mullen

Pass-through Deductions for Property Owners: New Clarity on Who Qualifies

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As part of the 2017 tax overhaul, provisions were put in place that allowed those holding property for rental purposes to write off up to a fifth of their rental income for tax purposes. The deduction was included in Code...more

Troutman Pepper

Choice of Entity Considerations Post-Tax Reform: Corporation or Flow-Through Entity?

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Choosing the appropriate type of entity is a multifaceted analysis and is necessarily dependent upon a variety of factors, including business objectives, type of business, desire for cash distributions, and ease of obtaining...more

Burr & Forman

Section 199A – The Decision to Aggregate

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Under the 2017 Tax Cuts and Jobs Act, Congress enacted the new Section 199A 20% profit deduction for owners of pass-through businesses, and which include Subchapter S corporations, LLCs, sole proprietorships, and even certain...more

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