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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

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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
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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, review business vs. nonbusiness income, discuss apportionment and allocation rules, 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 new and evolving rules (e.g., investee apportionment rules, market-based sourcing), many states increasingly determine where whether a taxpayer is engaged in business activities within the state to determine 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, whether the sale is treated as business or nonbusiness income, and the corresponding apportionment and/or allocation rules. Unfortunately, the lack of consistency among states can subject these transactions to double taxation.

Legislation in this area is fluid. 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.

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Outline

  1. SALT taxation of partnership interest sales: introduction
  2. Identifying the seller
  3. Which states may tax the gain
  4. Business vs. nonbusiness income
  5. Relevant apportionment or allocation rules
  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

Thickening, Andre
Andre Thickening
Senior Manager - State & Local Tax Services
BDO USA

Mr. Thickening is a Senior Manager - State & Local Tax Services at BDO USA. 

 |  Read More
Attend on June 18

Early Discount (through 05/23/25)

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Early Discount (through 05/23/25)

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