Advanced Multistate Taxation of Partnerships and Individual Partners

Business vs. Nonbusiness Income Characterization, Reconciling Conflicting States Tax Treatments and More

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, January 27, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will give partnership tax advisers a thorough and comprehensive exploration into advanced multistate tax issues facing partnerships with income or operations in multiple states.The program will provide tax advisers and professionals with a detailed and practical guide to critical state tax issues and trends impacting individual partners owning shares of multistate partnerships. The panel will discuss key questions such as whether the character of pass-through income is determined at partner or partnership level, and whether the pass-through income must be considered on an “aggregate” basis or at the “entity” basis.

Description

One of the more challenging areas of multistate tax practice is the taxation of partners in partnerships conducting activities in more than one state. Navigating various states’ treatment of partnerships, and particularly their nonresident partners, can result in unforeseen tax consequences and compliance burdens. Tax advisers must resolve several critical issues to accurately report partnership income.

Determining whether the partnership’s activities create nexus within the state, attributing the character of partnership income as active business income or passive investment income, and deciding whether the partnership elects to file a composite return or withhold tax are just some of the challenges faced by tax advisers. Reconciling various states’ approaches to taxation of multistate partnerships and partners creates additional complexity in both tax reporting and planning.

Also crucial is whether the character of partnership income must be determined at the partnership level or at the partner level. Very few states have issued any guidance as to where that income determination must be made, and those states that have addressed the question have split results. Because business income must be apportioned, while nonbusiness income must be allocated to the source state, the tax results vary from state to state as to the proper taxation of partnership income.

Listen as our experienced panel offers a comprehensive view of states’ approaches to taxing corporations on multistate partnership income.

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Outline

  1. Allocation vs. apportionment of partnership income
  2. Business vs. nonbusiness income—differing state approaches
  3. Aggregate vs. entity approach
  4. States providing option of composite return
  5. State requiring withholding on nonresident partners

Benefits

The panel will discuss these and other critical questions:

  • Which states require business/nonbusiness income determination at partner vs. partnership level
  • Determination of partnership income on aggregate basis vs. entity basis
  • Apportionment under the aggregate approach
  • State withholding

Faculty

Ned Leiby
Ned Leiby
Director, Income and Franchise Taxes
Ryan

Mr. Leiby's practice focuses on partnership taxation and state and local taxation of corporations, pass-through...  |  Read More

Zimmerman, Jennifer
Jennifer A. Zimmerman

Atty
Horwood Marcus & Berk Chartered

Ms. Zimmerman concentrates her practice in state and local tax planning and the resolution of state and local tax...  |  Read More

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