Advanced Multistate Taxation of Partnerships and Individual Partners

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

Note: CLE credit is not offered on this program

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


Conducted on Wednesday, December 9, 2020

Recorded event now available

or call 1-800-926-7926
Course Materials

This course 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 critical questions such as whether the character of pass-through income is determined at partner or partnership level, and whether to consider the pass-through income 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, particularly their nonresident partners, can result in unforeseen tax consequences and compliance burdens. Tax advisers must resolve several critical issues to report partnership income accurately.

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 the partner level. Very few states have issued any guidance regarding where to make that income determination. Some states that have addressed the question have split results. Because taxpayers must apportion business income and allocate nonbusiness income to the source state, the tax results vary from state to state regarding 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 matters:

  • States that require business/nonbusiness income determination at partner vs. partnership level
  • Partnership income on aggregate basis vs. entity basis
  • Apportionment under the aggregate approach
  • State withholding

Faculty

Arasu, Elil
Elil Shunmugavel Arasu

STS-SALT Managing Director
BDO USA

Ms. Arasu has more than 15 years of state tax consulting experience within a public accounting environment and...  |  Read More

Dagarag, Raymund
Raymund Dagarag

SALT Managing Director
BDO USA

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 |  Read More
Goldstein, Taryn
Taryn Goldstein, JD, LLM

SALT Managing Director
BDO USA

Ms. Goldstein leads the BDO Florida State and Local Tax practice as well as the southeast Credits and Incentives...  |  Read More

LaRosa, David
David LaRosa

SALT Senior Manager
BDO USA

Mr. LaRosa has 10 years of both federal and state tax experience, primarily at a big 4 accounting firm. He has...  |  Read More

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