Interested in training for your team? Click here to learn more

State Taxation of Partnership Interest Sales: Recent Legislation, State Apportionment and Allocation Methods, Business vs. Nonbusiness Income

Note: CLE credit is not offered on this program

A live 110-minute CPE video webinar with interactive Q&A

This program is included with the Strafford CPE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Wednesday, June 18, 2025

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

Early Registration Discount Deadline, Friday, May 23, 2025

or call 1-800-926-7926
Add to your calendar

This webinar will analyze state rules for taxing partnership interest sales and explain the application of these diverse guidelines for multistate companies and their advisers. Our panel of SALT experts will explain how to identify who is selling the partnership, discuss apportionment and allocation rules, review business vs. nonbusiness income, and provide examples of these thorny calculations and their application in specific states.

Description

In the simplest circumstances and former times, a taxpayer might only be taxed on the sale of a partnership interest in their resident state. Applying market-based sourcing rules, many states determine where customers reside or whether a taxpayer is engaged in business activities within the state to decide if a sale is taxable by the state.

For SALT practitioners and multistate businesses, these determinations are onerous. As with all SALT matters, state treatment of partnership interest sales varies. Treatment of the gain in specific states differs based on the type of members or partners (individual, corporate, etc) that comprise the LLC or partnership, apportionment and/or allocation rules, and whether the sale is treated as business or nonbusiness income. Unfortunately, the lack of consistency among states can subject these transactions to double taxation.

Legislation in this area is fluid. Recently, South Carolina allowed a resident taxpayer to apportion the gain on the sale of a partnership interest. The pass-through entity was engaged in business in multiple states. "The proportion of the Taxpayer's business carried on within South Carolina was 2.4% ... ." (PLR #24-1).

Multistate pass-through entities and their advisers need to grasp the rules surrounding state taxation of the sales of partnership interests.

Listen as our authoritative panel of state and local income tax veterans examines the inconsistent but common guidelines states invoke to tax the sale of partnership interests.

READ MORE

Outline

  1. SALT taxation of partnership interest sales: introduction
  2. Identifying the seller
  3. Which states may tax the gain
  4. Apportionment rules
  5. Business vs. nonbusiness income
  6. Taxing the sale
    1. Entity-level taxation
    2. Treatment as a single-member LLC
  7. Technical developments affecting a sale

Benefits

The panel will cover these and other key issues:

  • Determining apportionment and allocation rules for specific states
  • State trends and recent rulings impacting the sale of partnership interests
  • Identifying specific state criteria for taxing nonresident sales of partnerships
  • How potential double state taxation affects the disposition of a partnership

Faculty

Damin, John
John Damin
Managing Director
BDO USA

Mr. Damin is a Managing Director whose primary focus is in state and local income/franchise tax. His state tax...  |  Read More

Lipin, Ilya
Ilya A. Lipin
Tax Principal, Mid-Atlantic Region State and Local Tax Practice Leader
BDO USA

Mr. Lipin provides clients with state tax advice in the area of multistate income taxes, sales and use taxes, tax...  |  Read More

Attend on June 18

Early Discount (through 05/23/25)

CPE credit processing is available for an additional fee of $39.
CPE processing must be ordered prior to the event. See NASBA details.

Cannot Attend June 18?

Early Discount (through 05/23/25)

CPE credit is not available on downloads.

CPE On-Demand

See NASBA details.