IRS Guidance on Series Limited Liability Companies

01/01/2011

Series limited liability companies (LLCs) have been around since the state of Delaware created them by statute in 1996. Although various states (including Texas as of the last legislative session) have followed Delaware in providing for series LLCs, other than a Private Letter Ruling issued by the Internal Revenue Service in 2008, the IRS has never issued any formal guidance on the federal tax treatment of series LLCs. However, that changed on September 13, 2010, when the IRS issued Proposed Regulation Section 301.7701-1(a) (Proposed Regulations) addressing the treatment of these entities for federal income tax purposes. 

This article provides a brief description of series LLCs generally and selected highlights from the Proposed Regulations.

Excerpted from Headnotes, a publication of the Dallas Bar Association, Vol. 36, No. 1, January 2011, p. 12. To read the full article, click here.

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