Private Equity, Partnerships, Tax Liability

U.S. Tax Court Issues Ruling on Self-Employment Tax Exception for Limited Partners

Stinson LLP on 6/12/2025

On Wednesday, May 28, the U.S. Tax Court ruled in Soroban Capital Partners LP v. Commissioner that a "functional analysis" test applies when determining whether a limited partner who contributes services to a partnership may...more

Tax Court’s Decision in Soroban—Potential SECA Tax Implications for Management Fee Income

Morrison & Foerster LLP on 6/11/2025

On May 28, 2025, the U.S. Tax Court issued its decision in Soroban Capital Partners LP v. Commissioner (T.C. Memo 2025-52) (“Soroban”), holding that “limited partners” of a management company organized as a Delaware limited...more

The Limited Partner Exclusion From Self-Employment Tax – But Who Is A Limited Partner?

Rivkin Radler LLP on 6/11/2025

An Agency Under Siege - The mission statement of the IRS reminds taxpayers that it is their responsibility to understand and meet their tax obligations, while it is the role of the IRS to “enforce the [tax] law with...more

The IRS Continues Winning Self-Employment Contributions Act (SECA) Tax Against Limited Partners in Private Equity and Hedge Funds

White & Case LLP on 6/5/2025

Recently, the Internal Revenue Service ("IRS") has successfully asserted that limited partners in private equity and hedge funds that are organized as limited partnerships were subject to tax under the Self-Employment...more

Another Appeal Adds Fuel to the Limited Partner SECA Tax Debate

Cadwalader, Wickersham & Taft LLP on 5/29/2025

Denham Capital Management LP (“Denham”), a private equity firm, has appealed the recent U.S. Tax Court decision that declined to revisit its interpretation of the “limited partner exception” under the Self-Employment...more

Rolling Over and Section 704(c); What’s the Big Deal? — Part 4: The Remedial Method

Troutman Pepper Locke on 11/2/2023

In our continuing series on Section 704(c) of the Internal Revenue Code (the Code) we discuss the application of the remedial method to correct for distortions caused by the ceiling rule. As previously discussed, when the tax...more

Rolling Over and Section 704(c); What's the Big Deal? — Part 2: The Traditional Method

Troutman Pepper Locke on 10/19/2023

In Part 1 of our discussion on Section 704(c) (Part 1) we described the basic idea of how the inherent built-in tax gain or loss on a piece of property contributed to a partnership is allocated to the contributing partner. As...more

New York’s Pass-Through Entity Tax, F Reorgs, and the Sale of An Electing S Corp

Rivkin Radler LLP on 1/4/2022

Timing- I had planned to post this piece during the third week of December, a day or so after the exchange between Senator Manchin and the White House sealed the fate of the Build Back Better plan, at least in its current...more

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