Reply To: Change in Capital structure LLC

Home Fairmark Forum Other Tax Topics Change in Capital structure LLC Reply To: Change in Capital structure LLC

#77379
TaxMaster
Keymaster

Partners can decide among themselves to change the allocation percentages, but those changes must have “substantial economic effect.” A partner’s share of taxable income cannot become smaller unless that partner’s share of the economic profits becomes correspondingly smaller. Rules in this area are highly technical and beyond the scope of what we can deal with here.