No less than 90% of the partnership’s cost of its total assets consists of qualifying investment securities, deposits at banks or other financial institutions, and office space and equipment reasonably necessary to carry on its activities as an investment partnership.An investment partnership was defined as any entity that is a partnership for federal income tax purposes and meets the following requirements: Income of an investor in an investment partnership was generally treated as nonbusiness income sourced to the residence or commercial domicile of the investor. Under prior law, investment partnerships were exempted from Illinois’ entity-level Personal Property Tax Replacement Income Tax (the Replacement Tax). These changes are effective for tax years ending on or after December 31, 2023. While the new rules are intended to benefit private equity funds, they impact all investment partnerships to the extent they invest in partnerships that generate Illinois source income. The effect of the new law is to impose a “withholding tax” on the Illinois source income that is passed through from an operating partnership to an investment partnership, without imposing tax or a tax filing obligation on the investors in the investment partnership. The new investment partnership definition is intended to permit private equity funds to invest in operating businesses classified as pass-through entities without causing the private equity funds to lose their status as investment partnerships. 103-0009 (SB 1963), which, among other things, modifies the definition of “investment partnership” and requires investment partnerships to withhold tax on Illinois-sourced income allocated to its nonresident partners.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |