There are changes coming to any business operation that is currently taxed as a partnership in the United States. The concept of the “tax matters partner” is being done away with in favor of what is called a “partnership representative.”
If your company operates in New York and meets the definition of a “qualified emerging technology company” (a “QETC”) it is eligible for New York tax credits. Additionally if you are a New York State taxpayer and interested in investing in a QETC you may be eligible to claim a credit as well.
Partnership taxation is a complex area of tax law. We’ll be walking through some of the issues you should be aware of.
The first is to ensure you are getting the deal you thought you were. Partners (or LLC members where the LLC has multiple members and does not “check the box“) can agree on how to allocate the profit and losses of the business as they see fit in the agreement. The allocations can be done in any manner the partners/members choose, provided that the allocations have “substantial economic effect.” See IRC 704(b); Treas. Reg. 1.704-1(b).