Service P’ship – SE Tax and Other Issues; 2025 Tax Law Changes; QSBS Update

This course is drawn from Steve Gorin’s 2nd quarter 2025 newsletter.

In Soroban Capital Partners LP v. Commissioner, 161 T.C. 310 (2023), the Tax Court held that a limited partner may be subject to self-employment (SE) tax if the limited partner is sufficiently active in the business. The Tax Court held a trial and determined in May that the limited partners were sufficiently active to subject themselves to SE tax. The opinion provided insight into what cannot escape SE tax and what may qualify for the exclusion. Our presenter will look to certain other areas of tax law governing service partnerships for clues and compare and contrast service partnerships to other businesses in those areas.

Next, Steve will discuss various changes in the July 4 budget reconciliation law that affect business owners in a strategic way, including the 20% qualified business income deduction, IRC § 179 expensing, bonus depreciation, the business interest deduction, and opportunity zones.

Our presentation will conclude by delving into changes to the IRC § 1202 exclusion for gain on the sale of qualified small business stock (QSBS), including a deep dive into the rules and logistics when clients choose to convert partnerships and S corporations into C corporations.

Presenters:
Steve Gorin

Disclaimer:
The information provided herein is intended for general purposes only and is not intended to be legal advice. The ethical rules of some states require us to identify this as attorney advertising material. The choice of a lawyer is an important decision and should not be based solely upon advertisements. Past results obtained on behalf of current firm clients afford no guarantee of future results. Every case is different and must be judged on its own merits.