#partnerships
Partnerships
Partnership accounting, profit sharing, and financial management
Piton Holdings v. Commissioner: How a $41.6 Million Easement Deduction Shrank to $800,000 — and What Partnerships Should Learn
In Piton Holdings, LLC v. Commissioner (July 2026), the Tax Court cut a $41.6 million conservation easement deduction to $800,000, upheld the 40% gross valuation misstatement penalty, and voided $40.3 million in allocations to investors whose money arrived after the donation was recorded — two lessons on defensible appraisals and mid-year partner timing that apply to any LLC.
Sirius Solutions v. Commissioner: The Fifth Circuit Just Rewrote Self-Employment Tax for Limited Partners
On January 16, 2026, the Fifth Circuit held in Sirius Solutions v. Commissioner that "limited partner" under IRC Section 1402(a)(13) means state-law limited partner status — rejecting the IRS's functional test and exempting limited partners' distributive shares from the 15.3% SECA tax. The ruling excludes LLC members and binds only Texas, Louisiana, and Mississippi, so refund claims and clean bookkeeping both hinge on the details.
Disability Buy-Out Insurance: The Buy-Sell Agreement Gap Most Co-Owners Miss
A 35-year-old is six times more likely to become disabled than to die before 65, yet most buy-sell agreements only plan for death. How disability buy-out (DBO) insurance funds a co-owner buyout — elimination periods, cross-purchase vs. entity redemption, and why premiums are nondeductible but proceeds are tax-free.
IRS Business Tax Account Expands to Partnerships, Nonprofits, and Government Entities
On April 6, 2026, the IRS opened its free Business Tax Account portal to partnerships, tax-exempt organizations, and government entities, letting a designated official view balances, download an EIN verification notice, and make payments online instead of mailing paper forms.
Business Divorce: How Partner Buyout Valuation and Deadlock Actually Work
Roughly 54% of business partnerships dissolve within five years and about 70% of small business owners never signed a buy-sell agreement, leaving price, timeline, and process to be fought over from a blank page once partners can no longer agree.
IRS Small Business Penalty Overhaul for 2026: New Rates and Automatic Relief
For 2025 tax year returns filed in 2026, the IRS charges partnerships and S-corps $255 per partner or shareholder per month for late Forms 1065 and 1120-S, plus $330 per late Schedule K-1, while a new automatic relief program forgives first-time penalties for taxpayers with three years of clean compliance history.
Why Your K-1 Is Always Late (and What to Do About It This Year)
Late Schedule K-1s are the norm, not the exception — a Form 7004 extension pushes partnership and S-corp returns, and every K-1 tied to them, to September 15, a full five months past the April 15 personal deadline. The fix is a simple playbook, file Form 4868, pay at least 90% of a good-faith estimate, and amend with Form 1040-X once the real numbers arrive.
OBBBA SALT Cap and PTET: A Four-Year Window for Pass-Through Owners
OBBBA raises the federal SALT cap to $40,400 for 2026 with a 30-cent-per-dollar phase-out above $505,000 MAGI, then reverts to $10,000 in 2030. PTET elections in 36 states remain uncapped and still beat the cap for most high-income pass-through owners. State deadlines, bunching priorities, and the 2030 cliff explained.
Opportunity Zones 2.0: A 2026 Planning Guide for Real Estate Sponsors and Family Offices
The One Big Beautiful Bill Act made Qualified Opportunity Zones permanent and introduced rolling 5-year deferrals, decennial map redesignations starting July 1, 2026, a new rural fund class (QROF) with a 30% basis step-up at year 5, and $10,000-per-return reporting penalties. Here is the planning sequence for sponsors and family offices through the 2026–2027 window.
Section 199A QBI Deduction in 2026: A Pass-Through Owner's Playbook After the One Big Beautiful Bill Act
The One Big Beautiful Bill Act made Section 199A permanent, added a $400 minimum deduction for active small-business owners starting in 2026, and widened the joint phase-in range to $150,000. A field guide to the three QBI tiers, wage tuning, UBIA, aggregation, and SSTB positioning for pass-through owners.
Section 1402(a)(13) After Soroban: The Limited Partner SE Tax Exemption in 2026
Since the Tax Court's 2023 Soroban decision, a state-law limited partner label no longer shields distributive share from 15.3% self-employment tax. This guide walks through the functional test under Section 1402(a)(13), the Renkemeyer line of cases, the 2024 proposed regulations, and the planning moves that still hold up for fund managers, LLC members, and operating partners in 2026.
The Section 199A QBI Deduction in 2026: A Permanent 20% Tax Break for Pass-Through Business Owners
OBBBA made the Section 199A pass-through deduction permanent and widened the 2026 phase-in to $201,750 single / $403,500 MFJ. Here is how the 20% QBI deduction, the W-2 wages and UBIA caps, the SSTB phase-out, the new $400 minimum, and Form 8995-A aggregation actually work for S-corps, LLCs, and partnerships.