If an LLC converts to a limited partnership can the entity qualify for passive if it meets the 90% passive income test?
To qualify as a passive entity, the entity must be a partnership or trust, other than a business trust, for the entire accounting period on which the tax is based. The entity may not qualify as passive for the accounting period during which the conversion occurs even if it meets the 90% income test. The entity may qualify as passive for subsequent reports.
Related Questions
- My business entity (Corporation, LLC, Partnership, etc) is entirely passive and/or dormant and it is just paying a minimum tax to the Secretary of State. Is it required to get a license?
- If an LLC converts to a limited partnership can the entity qualify for passive if it meets the 90% passive income test?
- Can a limited liability partnership qualify as a passive entity?
