Partnerships vs. S Corporations: A Federal Tax Comparison From Formation to Exit

This webinar will provide an in-depth, practical comparison of partnerships and S corporations for federal income tax purposes, examining how the two entity types differ from formation through ongoing operations and ultimately to distributions and exit transactions. Our panel of experienced practitioners will walk through the technical rules, planning opportunities, and common traps associated with entity selection and its tax implications.

Entity choice remains one of the most consequential tax decisions for closely held businesses, real estate ventures, and professional service firms. While partnerships offer flexibility in allocations, distributions, and capital structuring, S corporations provide payroll tax efficiencies and simpler operating mechanics. Formation considerations, including contributions of cash, property, and liabilities, as well as eligibility limitations, affect the choice of entity and the initial tax basis. 

Operational tax treatment, including income allocations, guaranteed payments versus reasonable compensation, fringe benefit limitations, and the interaction of losses with basis, at risk, and passive activity rules under §465 and §469 varies significantly depending on whether the entity is a partnership or S corporation, as does the tax treatment of distributions and exits, where these differences are perhaps most pronounced. 

Listen as our panel of seasoned CPAs discusses how to analyze the tax consequences of partnership and S corporation structures, including key considerations from formation through exit strategies.