State Taxation on the Sale of Pass-Through Entity Interests
Sourcing Issues, Tiered Entities, Apportionment vs. Allocation, Residents vs. Nonresidents, Circumventing the SALT CAP
Recording of a 110-minute CPE webinar with Q&A
This webinar will explain the issues practitioners encounter when reporting and taxing the sale of an interest held in a pass-through entity (PTE). Our panel of SALT veterans will discuss how types of owners, residency, and various state approaches (or lack thereof) impact these calculations, including examples of taxation in specific states.
Outline
- Flow-through entities
- Determining nexus
- Determining state taxable income
- Specific sourcing issues
- Gain on sales of interests
- Classification as an asset sale
- Sales of intangibles
- Other issues
- Other entity-level taxes
- Circumventing SALT cap
Benefits
The panel will review these and other critical issues:
- Which states continue to recognize technical terminations and the related SALT issues
- Which states are a member of the MTC (Multi-State Compact) and the related PTE sales methodology
- How asset sales and stock sales treatment differs among states
- How residency impacts state reporting of disposition income
- How ownership type (individual, entity, tiered entity) affects state taxation of PTEs
Faculty
Nicholas Montorio
Managing Director
BDO USA
Mr. Montorio advises the firm’s clients on a variety of multistate tax matters involving business activity taxes... | Read More
Mr. Montorio advises the firm’s clients on a variety of multistate tax matters involving business activity taxes and transaction taxes. Prior to joining BDO, he spent three years in the SALT group at a Big 4, where he provided multistate tax planning and consulting services to clients regarding their state and local tax obligations. He also spent over three years working at a mid-sized law firm in New York City, where he worked on a variety of transactions on behalf of the firm’s corporate and real estate clients. He regularly represented corporations and pass-through entities regarding federal, state and local tax matters, with a specialty in real estate matters. He regularly advised on planning and structuring opportunities to minimize state and local taxation, and also represented clients in SALT controversies regarding the NYC Unincorporated Business Tax, real property transfer taxes, sales and use taxes, and tax residency for individuals.
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Richard W. Spengler, CPA
Managing Director - Multi State Tax Consulting
BDO USA
Mr. Spengler's main area of focus is state income and franchise taxes with significant experience in the design and... | Read More
Mr. Spengler's main area of focus is state income and franchise taxes with significant experience in the design and implementation of legal entity structures that are more tax efficient. As a result of his unique background, he has had success in designing structures that both minimize the impact on his client’s operations while maximizing the tax savings received by the client. Mr. Spengler specializes in the design of structures that both complement the client’s underlying business and provide diversified tax savings. As such, he has successfully designed structures for clients that simultaneously reduce state income tax, Single Business Tax, franchise tax, sales & use tax and federal income tax while logically fitting within the way the business operates. In addition to restructuring work, Mr. Spengler also has significant experience with the analysis of tax return positions and with the subtle interaction between the Federal income tax framework and its impact on a client’s state income tax reporting. He has had a great deal of success with securing significant refunds for clients related to gray and misunderstood areas of the tax law.
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