What’s in a Name: Who Qualifies as a Limited Partner for Self-Employment Tax Purposes?

Authors

• Walter D. Schwidetzky, University of Baltimore School of LawFollow

Document Type

Article

Journal Title

Journal of Taxation of Investments

Volume

41

First Page

3

Publication Date

Winter 2024

Abstract

There have been several cases that have looked at what it means to be a limited partner for Section 1402(a)(13) purposes. The definition is an important one as generally under the Code a limited partner’s share of income is excluded from net earnings from self-employment, which in turn means it is not subject to relevant Social Security and Medicare taxes. Recently, the Tax Court, in Soroban, concluded that it is not sufficient for Section 1402(a)(13) purposes to meet the definition of limited partner for state-law purposes. The taxpayer must be a limited partner in substance, essentially meaning the limited partner must be a passive investor.

Recommended Citation

Schwidetzky, Walter D., "What’s in a Name: Who Qualifies as a Limited Partner for Self-Employment Tax Purposes?" (2024). Articles. 52.
https://scholarworks.law.ubalt.edu/fac_articles/52