Redefining Qualifying Income for Publicly Traded Partnerships

Download or read book Redefining Qualifying Income for Publicly Traded Partnerships written by Emily Cauble and published by . This book was released on 2014 with total page 10 pages. Available in PDF, EPUB and Kindle. Book excerpt: In general, business entities are subject to the section 11 corporate tax if they are publicly traded. Corporate tax is justified under the rationale that entities will pay tax in exchange for access to an established market because liquidity has value. It allows owners of large enterprises to easily exit by selling their shares. Publicly traded partnerships can avoid being subject to corporate tax under current law if they earn primarily qualifying income. The best rationale for this exemption from corporate tax is that the partners could have access to the income of the publicly traded partnership by buying the assets of the partnership directly. Congress should redefine qualifying income to make the definition better fit that rationale by classifying income as qualifying only if it is earned by holding publicly traded stock or other publicly traded assets.