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Video Tips: Limited Partner – What You Need to Know

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Video Tips: Limited Partner – What You Need to Know

For years, taxpayers and practitioners have treated the phrase “limited partner” as a potential shield against self-employment tax. That issue has now become much more complicated. Recent rulings from the Tax Court and the Fifth Circuit Court of Appeals have taken very different approaches to the question of when a limited partner’s distributive share of the business’s income is subject to self-employment tax.

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