Efficiency Considerations in the Taxation of Compensatory Partnership Interests

• In Event: Taxes and Choice of Entity

Abstract

The proper taxation of the receipt of a compensatory partnership interest (CPI) has received substantial attention over the years, but a comprehensive analysis of the efficiency considerations that should play a role is lacking. The availability of close substitutes to CPIs significantly constrains the options realistically available unless and until the tax rules for the substitutes are adjusted accordingly.

Author

• David Hasen, University of Florida Levin College of Law