Tax Issues and Considerations in Entity Conversion (C Corporation to Partnership) (Partnership to C Corporation)

Summary

This practice note addresses certain U.S. federal income tax considerations when converting a C corporation to a partnership, and when converting a partnership to a C corporation. For purposes of this practice note, a C corporation includes any domestic corporation taxable as a C corporation, including a limited liability company (LLC) that has elected to be taxed as a corporation under the check-the-box rules. A partnership includes any entity that is treated as a partnership for U.S federal income tax purposes, including an LLC that has multiple members and that has not made an election to be taxed as a corporation. This practice note only applies to entities that are organized in the U.S. and to U.S. persons, and does not discuss any tax considerations applicable to entities organized in any U.S. territories or outside the U.S. or any non-U.S. shareholders or partners. In addition, this practice note does not discuss any state or local tax considerations.