Income Tax

Growth in LLCs complicates partnership tax law

I have been a tax practitioner for over 36 years. I have been a CPA for over 35 years. And for much of my career, partnership tax has been my principal focus.

I have taught partnership tax courses for several international CPA firms. I have taught partnership tax for state CPA societies, associations of CPA firms, and at many annual tax conferences.

In recent years I have come to appreciate an old saying, not attributed to a particular person, that “I don’t have a solution but I certainly admire the problem.”

I might have more solutions than problems with most partnership tax issues, but there is a looming issue that partnership tax practitioners fear at a level of the “Y2K” problem that once struck fear into the hearts of citizens of the world.

There are more than 4 million partnership tax returns filed each year. Many of these are fairly simple arrangements with few partners. Some are quite complex and involve many partners.

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