Venable partner Brian Masterson and associate Michael Bloom were interviewed by Bloomberg BNA in a February 10, 2012 Q&A on entity-level taxes on unincorporated businesses. In the interview, Masterson and Bloom, discussed the intricacies of these taxes and offered guidance on how to avoid the pitfalls of taxes.
When asked what types of entities are generally subject to unincorporated business taxes (UBT), Masterson and Bloom said, “Noncorporate entities whose members have limited liability for state law purposes and are taxed as partnerships or disregarded for federal income tax purposes may be subject to UBT. These entities include LPs, LLPs, and LLCs. It is also important to note that state law corporations and LLCs that have elected to be treated as an S corporation for federal income tax purposes may be subject to an entity-level state and local income or franchise tax.”
When asked what types of entities are generally subject to unincorporated business taxes (UBT), Masterson and Bloom said, “Noncorporate entities whose members have limited liability for state law purposes and are taxed as partnerships or disregarded for federal income tax purposes may be subject to UBT. These entities include LPs, LLPs, and LLCs. It is also important to note that state law corporations and LLCs that have elected to be treated as an S corporation for federal income tax purposes may be subject to an entity-level state and local income or franchise tax.”