NTA2324. Navigating Pass-Through Entity Tax: Federal and State Challenges

Numerous issues exist here including how to report state entity tax on investment income, treatment of refunds at both entity and owner level, traps for the unwary, IRS notices, and more. At this point, close to 30 states have implemented a form of Pass-Through Entity tax (PTET) which seeks to allow individuals a workaround for the cap on State and Local tax Deductions. The benefits and burdens differ drastically from state to state and keeping track of this is imperative for passthrough business.

Learning Objectives:

• Determine situations where electing into a PTE regime may not be advantageous
• Identify the federal income tax consequences of the a PTET payment