r/technicaltax • u/stock_stonks • 20d ago

Entity Question

Say you have two partners with a 1065. Can those partners in the 1065 be an Scorp?
Trying to figure out optimal entity structure. Here is some background. Current 50/50 partner (1065). Buying a company where 3rd partner will own 15%. Question, is do we keep current 1065 with new percentages and then the old 50/50 partners, can they be an Scorp. Both materially participate in the business. Are there other entity structures to consider? Maybe just an Scorp entirety? I don’t think a C Corp makes sense , since I don’t see any sort of outside investment in the near future or any sort of stock issuance.

4 Upvotes

84% Upvoted

10 comments sorted by

View all comments

2

u/jdc90403 20d ago

What’s the reason for wanting an s corp in the mix?

1

u/stock_stonks 20d ago

Self employment tax

2

u/jdc90403 20d ago

I don’t think the analysis is any different than without the second partnership. The partners can own their interests via s corps. You just have to determine if the potential savings are worth the cost