Taxpayer can't avoid becoming partner and claim income was partnership distributions, circuit court holds

12/3/2012 |

The Eleventh Circuit Court of Appeals affirmed that a taxpayer couldn't characterize funds received from a partnership as partnership distributions when he avoided becoming a partner and performed personal services for the partnership. The taxpayer set up a variety of entities including a sham partnership to run his nursing home business and used funds from the nursing home as personal income, and the court held that he owed tax on this self-employment income.

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