{Research} Richard Meyer and two friends from law school recently formed Meyer a

Question

{Research} Richard Meyer and two friends from law school recently formed Meyer and Associates as a limited liability partnership (LLP). Income from the partnership will be split equally among the partners. The partnership will generate fee income primarily from representing clients in bankruptcy and foreclosure matters. While some attorney friends have suggested that the partners’ earnings will be self-employment income, other attorneys they know from their local bar association meetings claim just the opposite. After examining relevant authority, explain how you would advise Meyer and Associates on this matter. { Hint : See §1402(a)(13) and Renkemeyer, Campbell & Weaver LLP v. Commissioner, 136 T.C. 137 (2011)

Explanation / Answer

Referring to the case mentioned in the hint, the court orders are that the earnings from LLP partnership should be treated as a self employment income and should be taxed on that basis I.e. self employment tax

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