Mar. 9, 2026
5th Circuit clarifies 'limited partner' status for self-employment tax purposes
A recent 5th Circuit decision clarified that for federal self-employment tax purposes, a "limited partner" is defined by state-law limited partnership status rather than the partner's level of day-to-day business participation, potentially reshaping how partnerships approach tax planning.
Phil Jelsma
Partner and Chair of the Tax Practice Team
Crosbie Gliner Schiffman Southard & Swanson LLC (CGS3)
Email: pjelsma@cgs3.com
Phil is chair of the tax practice team at CGS3. He is recognized as a leading joint venture and tax attorney, with a 30-year background in real estate exchange transactions, syndications, nonprofit corporations and international tax planning.
What is the definition of a limited partner? That simple question was the crux of a recent appeals court decision--and the answer c...
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