Partners Jennifer Breen, Richard Zarin, Daniel Carmody, Stephen Tirrell, and Jedd Wider, with associate Scott Lee, co-authored an article for Law360 looking at the US Tax Court’s recent decision in Soroban Capital Partners LP v. Commissioner of Internal Revenue and how it will impact self-employment tax exposure for limited partnerships.
The authors provide a background on the Soroban case, which involves a New York hedge fund management business organized as a Delaware limited partnership, and discuss notable aspects of the opinion, including the court’s focus on the term “as such” to define the statutory limited partners exemption. The article concludes with a look ahead at what this decision means for state law limited partnerships and their limited partners.