Partnership and LLC Taxation: Entities Taxed as Partnerships

Author: Greg White

We'll cover important planning strategies and have some fun along the way.

Publication Date: November 2025

Designed For
Tax professionals who practice in the partnership area.

Topics Covered

• What's a partnership for tax purposes?
• Why does it matter if you have a partnership?
• When do LLC members pay self-employment tax?
• §199A (QBID) for partnerships
• Allocating losses to partners' K-1s
• Fringe benefits for partners
• Gain on sale of partnership interest
• Liability allocations on Form K-1
• Step-ups
• Allocating depreciation under §704(c)
• Transforming interest expense
• Notifying the IRS of inconsistencies with K-1

Learning Objectives

• Identify important considerations at the formation of a partnership
• Recognize opportunities to admit new partners with no tax to the new partner, and an exit strategy for departing partners
• Identify planning strategies to maximize partnership section 199A deductions
• Identify deducting payments for redemption of a partnership interest (service partnerships)
• Identify circumstances where a partnership works better than an S corp and when it doesn’t
• Identify partnerships that can elect out of the new partnership audit regime (CPAR), and when they should elect out
• Identify circumstances in which self-employment tax doesn’t apply to limited partners and LLC members
• Identify the phase-in range for married filing jointly taxpayers with respect to QBID
• Identify the unrecaptured §1250 rate
• Identify the number of ways to perform partnership allocations

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
Some experience in the federal taxation of partnerships.

Advance Preparation
None